The "democratization of commerce."

A friend just sent me a link to an interesting article on TechCrunch, where a Mr. Chi-Hua Chien argues "We’re now entering an era around the democratization of commerce." According to Mr. Chien "Technology has helped to level the playing field across a wide range of industries, letting more individuals come to the table in fields such as publishing, entertainment and, of course, building web startups" and of course he suggests the next industry sector ripe for "democratization" is the world of commerce. His argument is that "companies such as Safeway and Wal-Mart rising to the top of the commerce space by simply being the best at aggregating a suite of products into one space." However, Mr. Chien suggested that there will be "'an unwinding of aggregation of commerce as technology starts to disrupt' the industry."

It is an interesting notion and one that is already happening in Taiwan. I know a few people who are doing all their shopping online. Companies such as PC Home allow people to buy anything (including groceries) online and have a fairly fast delivery service (depending on the product and time of day). There are also other shopping online shopping stores likes MarketTaiwan that enables stay-at-home moms (and others) to have their own associates shopping store and is popularized by the social networking activities of the "store owner." Even when we lived in China, way back in 2005, there was a similar type of company (for groceries) that took orders only over the telephone without a bricks and mortar store.  In fact, I have also heard that here in Taiwan (and I am sure they exist in other places) there are people who never leave their home (unless its for work): they do all their socializing and their shopping online.

 

So yes, stores like MarketTaiwan certainly help democratize the commercial market space dominated by big supermarkets but for this to happen there will need to be an amazing logistics infrastructure in place to ensure that delivery costs are kept as low as possible and that deliveries can be made quickly and efficiently. Of course, large cities (like Greater Taipei) or smallish countries (like Taiwan) are ideal for this type of business model where warehouses can be built up relatively close to all their customers. But, for rural towns with small populations far away from major commercial centers, this may be a difficult business model to maintain. There are definite benefits for the individual marketplace owner and the people who can easily buy goods, but I don't think the disruption will be as quick as it was for information, publishing and music.