There is inexplicable power in unity, no matter the diversity. This is the adage mobilizing one of the most crucial digital strategies today – platformisation.

Platformisation refers to the penetration of infrastructures, economic processes and governmental frameworks of digital platforms in different economic sectors. With the high proliferation of apps, websites and other digital delivery modes, offering similar services, why not bring them together on one platform? According to a recent NASSCOM report, India can unlock economic value worth $700billion by 2030 if it adopts open digital platforms in areas like healthcare, agriculture, education and urban governance. Creating digital platforms and ecosystems around them can drive $500 billion in new value and drive additional savings of $200 billion.

While businesses are now slowly realizing the transformative power of platforms, this startup has been pioneering this approach for months now. Shopx, one of India’s leading eB2B platforms, has adopted a digital and ecosystem-led route to dramatically enhance scale and profitability, using what it calls the “ShopX Open Architecture”. The ShopX Open Architecture will provide a comprehensive, flexible and open technology and business platform to brands and suppliers. Brands and suppliers can configure the platform to their choice and use either parts or all of it. Retailers, on the other hand, get much enhanced selection and optionality on their fingertips. The Bangalore-based retail tech startup is already talking to two global FMCG brands to power their nationwide distribution.

Here are some excerpts of the conversation with Amit Sharma, Founder-CEO & Product Architect, Shopx on building this platform, the benefits it offers and what it takes to build a digital platform architecture

What led you to adopt a platform-first approach for your network of sellers and buyers?

During Covid19, we got an opportunity to take a pause and think hard about our industry. We realized that the long-term change is happening in the direction of an evolution from a monolithic commerce architecture to an open and interoperable architecture, which will unlock tremendous scale and efficiency for ShopX, its partners and the entire ecosystem. The future is digital and direct. Post pandemic, brands are looking for direct ways to connect with both retailers and consumers. In this, they want several features that are very different from the traditional “full stack” model being pursued by most players.

So, how does this work?

We realigned the organization and priorities towards a model that allows others to use our tech and competencies rather than running the whole supply chain. We believe that this also monetizes the underlying assets much more profitably and scalably. All partners of ShopX, including its suppliers, financial services providers, logistics partners etc will have a role to play and an enhanced scale to address. The addressable market for this space can be expanded at least 10 times using this approach.

What are the tangible benefits that sellers are experiencing through this platform?

Today, brands want to establish their own Direct to Consumer (D2C) and Direct to Retail (D2R) strategies. I see three key benefits to sellers being on our platform – customer ownership, granular data on customer and market insights (and consequently, ownership of this granular data), and gaining control on brand presence. A brand ultimately wants to stand out from its competitors – closed platforms force homogenization but open platforms allow for brand identity to thrive. A platform approach can unlock between 10x-100x potential for brands to proliferate the market. For companies pioneering this approach, it works out to be economical for it is asset light, can leverage existing infrastructure like customer relationships, delivery checkpoints, supply chains, warehousing capabilities and the like. The dual pursuit of efficiency and scale made us want to pursue a platformisation strategy.

At what point does a business have to start thinking about a platform?

I think businesses should keep this in mind from Day Zero. In our case, if we didn’t have the intrinsic platform architecture from Day Zero, we wouldn’t be able to realign like we did last year. Some elements like the tech stack and operational processes have to factor in a future platform pivot so the transition is smooth, whenever it happens. AWS is one of the best examples of platformising their cloud business.

What are the key ingredients to building a platform?

Privacy and trust are key ingredients. The challenge is to get external but immediate stakeholders believe in this vision of platformisation. Some vital questions one can expect include: “What happens to my customer data?” “Will my data be shared with my competitors?” “Are you going to erode my competitive advantage or protect & strengthen it?” It is imperative to address these queries, and factor them into the architecture. While decentralization is essential for a democratized approach to business in the digital era, there should be room for every player to display his unique-ness. Some obvious benefits are a single, unified interface, common loyalty program, common payment modes etc. But brands also seek a space for their individual brand stories that appeal to their target audience while keeping the door open for new customers. Trust is currency, and its upto the technology solution providers to enable that trust through architecture.

How has the response been so far?

This is definitely a future-forward move. Over the next 3-5 years, the need of the hour across businesses will be to host open and neutral platforms. The traditional wisdom of a full-stack being the only great idea is waning – it still works for some business models and companies, but in retail, we are seeing a definite shift towards openness in architecture.

Also Read: The magic of Digital India delivered via platforms