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Three Paradoxes of Digitalisation

June 5, 2017 • BUSINESS & INNOVATION, Digital Transformation

By Hermawan Kartajaya and Ardhi Ridwansyah

 Management has been inevitably transformed by the digital era. Hermawan Kartajaya and Ardhi Ridwansyah discuss the Three Paradoxes of Digitalisation essential to a company’s success in winning the hearts and minds of its digital consumers.

 

More than 20 years ago, Charles Handy in the book “The Age of Paradox” called many world events, including the development of technology, a paradox. Many of those epiphanies stand true today. Interesting example can be found in Asia’s retail industry: amid the flourishing e-commerce, a contrasting trend is also emerging.

Some e-commerce companies in Asia are beginning to realise the importance of creating offline experience for shoppers. Moving beyond conventional cash-on-delivery model, Zalora, a Singapore-based online fashion retailer, offers a unique payment method. The websites provide a cash-on-collection option, a concept that has already gained popularity in Taiwan and Japan. Collaborating with some convenience store chains, Zalora gives its customers an option of picking up and paying for their items at an outlet of their choice. They have also started erecting “popup” stores across shopping centres to educate shoppers and encourage them to use their apps.

This represents one of the paradoxes occurring as a consequence of digitalisation in Asia. For businesses, in order to win over competition in this new digital era, three paradoxes described below need to be understood and managed appropriately.

 

Three Paradoxes of Digitalisation

 

Online vs Offline

Internet technology does provide convenience and high efficiency. The interaction between the company and the customer can take place anytime and anywhere. This is what is prompting companies in Asia to flock to the online world, building their official websites, nurturing online communities and setting up special social media teams to build relationships with customers. But as a matter of fact, the online world still have limitations which means that conventional approaches of the offline world cannot be completely replaced. Despite growing internet usage and the seemingly improving tech-savviness among Asians, most consumers may not yet be fully familiar with digital services or simply not be sufficiently confident to take jump on to the digital bandwagon. In order for companies to make the most of their ambitions to go digital, there is ostensibly a growing need to put special attention on customer education on the online world and much of it cannot be accomplished only online.

In order for companies to make the most of their ambitions to go digital, there is ostensibly a growing need to put special attention on customer education on the online world and much of it cannot be accomplished only online.

An online retailer like Zalora’s initiative to go offline via cash-on-collection option and popup stores is an example of how businesses are striving to make offline and online shopping work together seamlessly. Neither option is mutually exclusive. In fact, in the near future, perhaps we would stop comparing Zalora and the likes to traditional, brick-and-mortar, offline retailers. There will just be “shopping” and it will be an integrated online and offline experience.

Commenting on this integration of online and offline interaction, Kasireddy from Fonterra in China says: “differentiating online and offline is really a false distinction. It’s much more important to get the offline and the online working together seamlessly” (The Economist Corporate Network, 2015).

 
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