We ideally never compete. Instead, we work together as an industry and try to see how our beloved, pampered customers are interacting with the solutions provided by our industry fraternity and what better we can provide to them. This can be dealt only with friendship. Enmity can lead to an eye-gouging battle. ~ My personal quote and thought.
2016 ended with two really dark, yet significant developments:
1. The rants of "requirement of capital, but not investments by foreign companies" by the CEOs of Ola and Flipkart, which fundamentally questions the globalization policy laid down by our beloved former Prime Minister, Shri PV Narasimha Rao.
2. The massive hunger strike of the driver partners of Uber and Ola.
Since long, there have been talks within the investor communities about making the right investment decisions. We all continue to say that Uber and Amazon continue making money and getting the love and respect of more customers consequently, while Ola and Flipkart just keep losing more and more money by their costs of customer acquisitions.
Before we make any anti-globalization comment, we need to understand the way the companies have interacted with "Competition". Let us see two examples.
EXAMPLE ONE. AMAZON V/S FLIPKART.
FLIPKART: Known for its offers, discounts, big billion day sales. Recently
Recently bought Myntra, Jabong and several companies. Continuously burning a lot of investors' money and still facing valuation drops.
AMAZON: Known for its interactive e-commerce platform, active customer and partner care, Investments in Amazon Go [next gen retail], Amazon Web Services, Amazon Now [video streaming platform], and so many other resources which not only create great shopping experiences but also enable anyone to become a seller and have great experiences altogether. It has completely worked on the seller to customer flow.
EXAMPLE TWO: Ola V/s Uber.
A TYPICAL OLA ADVERTISEMENT: Now get Ola Micro Rides for Rs. 5/km
A LATEST UBER ADVERTISEMENT: This new year, take a pledge to have at least 3 Uber Pool rides and get a year of free pool rides. And, after a week we receive an impact report from Uber.
So, what can we infer from these two examples?
Discount is a typical sethji-style business. "Sasta aur tikau"-mentality driven. Which has kept the Indian consumer to behave in the same way, however, at the same time, fails in developing customers and making them a part of your business growth. Attracting new Customer comes at the load point of such a business. Indicative of foolish investment decisions.
Instead, value-driven businesses just work on the production-to-customer flowpath, innovate on all aspects of the flow, work on getting more intelligence, invest in technology and team accordingly which gets them traction for the exclusive solution, and the company continues to get the fruits of the diverse traction.
The massive strike by the cab drivers of Hyderabad is one such blatant example of how copy-paste business model destroyed the lives of so many drivers. Ola tried implementing something which Uber had already implemented. That created a crowd of so many drivers that the drivers started losing business. A complete failure in handling a competition.
When we run a particular business, we have to understand that we are not, and cannot be alone in an industry. Yes, we do have competition. But, competition cannot be a fierce battle, but instead a game of intelligence of assessing how customers currently interact with other solutions, investing in technology and team for building something way better, simultaneously in synch with the normal consumer behavior, which would actually give you the traction you expect. Let us not make the ocean completely polluted. Let us keep it a bit blue, so that others do not get scared to enter into the fray.
We need to remember that we are not baniya businessmen. I have a respect for their business styles but I do not want to implement them. We have to work according to this customer-centric 21st century, and take ownership of the industry, feel as a government and create value-driven customer-acquisition methods which save a lot of money, which you can invest in getting more intelligence, building your technology, hiring your team etc. In such a value-driven business, marketing expenses can never significantly exceed the other expenses. It only happens when you need to showcase your uniqueness in just implementing what others have implemented just because you think that to be a well-tested case practice.
SO, HERE IS HOW WE SHOULD BEHAVE AS AN INDUSTRY:
1. Learn to share certain resources. Let us not refrain from baby-sitting each other's babies even if we are mothers of our baby.
2. Let us learn to share our partners to certain extent which doesn't impact us in any way. Let us make our partners compare us with those who share our partners, and that becomes first source of intelligence for us.
3. Let us invest more in intelligence, then build our technology and hire our team, which can anyways bring a lot of good traction.
4. Let us have the courage to join our partners in mega initiatives aimed at solving the biggest social, economic or environmental or administrative challenges our societies and business fraternities face today.
Competition today is not a sword fight. It is just to create new toys for our baby, and stand with the toy such that the baby gets the toy easily. The happiest baby who got the best toys requiring to reach the least height to get to the toys makes his giver the winner.
And, the ones adaptive to this, will sustain. The ones who are not, will perish.