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"Disintermediation" is a fallacy!
"Disintermediation" is a fallacy!

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"Disintermediation" is a fallacy! What we are really experiencing is "reintermediation"; i.e. the industry value chains are being redrawn with digital platforms/ marketplaces replacing the traditional agencies.

Within these platforms/ marketplaces, not always are producers selling directly to consumers. There are aggregators and resellers. So not accurate to assume that middlemen/ middlewomen have been fully eliminated or drastically reduced. We just have new forms of them.

Nothing wrong with all this as it ultimately benefits the consumers with increased availability, competitive pricing, superior products and services, more convenience/ enhanced experience, etc.

We all love a good intermediary, preferably a known/ referred and trusted intermediary. We like the salesperson in the store who can make suggestions and help us choose, or an e-commerce platform which throws ratings and recommendations. We have all come to expect some level or personalization and convenience, and that is where intermediaries continue to have a play, whether in physical or digital or phygital form.

And yes, the digital platforms/ marketplaces are transforming the industry value chains and bringing much needed efficiencies.

Most important thing for market regulators is to ensure there are multiple players (big and small, old and new) so there is healthy competition, that there is fairness and transparency in the system, and that consumer data and privacy is protected, while also ensuring innovation is supported and encouraged.

 


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