The year 2020 was a year of disruptions, which impacted the businesses world over. Uncertainties, frequent lockdowns, social distancing and travel restrictions forced businesses and organisations to rethink and recast their strategies, not just for survival, but also for continued sustenance. Transformation was easier for those with digital maturity while the going became tough for those who lacked exposure to Information Communication Technology (ICT). That underscores the crucial role digitisation plays when uncertain times kick in unpredictable challenges.
Viewed from this prism, it would be a worthwhile effort to understand where the construction industry stands in terms of digitisation. It is important because the construction industry, world over, has resolutely remained conventional in its practices till the recent past even while other sectors have embraced changes in tune with changing times. But the good thing about the year 2020 was that its inclusive disruption pattern did not spare even the construction industry. Shedding its long-held inhibitions, if the industry took its first baby steps into the digital world, it should thank the events that unfolded last year.
The change being all-pervasive, its reverberations could be felt in India, too, where e-commerce companies are now reshaping the fundamental structure of the construction and infrastructure industry and its core functions. Interestingly, India’s construction sector is the second largest industry after agriculture. It provides employment to over 35 million people and contributes 9 per cent to the national GDP. The domestic real estate market having touched US$ 140 billion mark in 2017, India is predicted to emerge as the world’s third largest market in construction by 2025.
The country’s construction industry being mammoth in size, opportunities for scaling up are also abundant for e-commerce start-ups since they democratise the access to construction materials and products and services. Traditionally, the construction industry has been following the Brick and Mortar system while procuring resources. ICT application is fast replacing this system with e-procurement since it drastically reduces the time spent on product/service-hunting, offers a rich variety to choose from besides competitive prices and total transparency with direct bearing on projects’ timely completion and cost.
The rise of e-commerce platforms exclusively dedicated to the construction industry is not surprising because most real estate players do not even spend 1 percent of their revenue towards technology enhancement. Why is this? The founders of arqonz – an early e-commerce bird to get into the construction segment – explain better: “There are two reasons. One, prohibitive cost, two, it is a distraction, meaning core areas receive less focus.” Arqonz which caters to the needs of both B2B and B2C segments links its subscribers to supply chains through its powerful catalogue management that runs on AI and machine learning.
Despite deploying advanced tools and software to ensure hassle-free ordering and on-time delivery, it is not easy even for a platform like Arqonz since a lot of time needs to be spent on guiding and educating the clients on the ‘whys’ and ‘hows’ of e-commerce procurement. So, no wonder, it has dedicated customer relationship managers who guide the clients, be it finding the right products, certified architects, builders, contractors or interior designers. As more e-commerce players step into the construction segment, it is likely that the construction industry is headed toward a massive disruption cycle.
But is India’s construction industry ready for a change? American writer and futurist Alvin Toffler once observed that “the illiterate of the 21st century will not be those who cannot read and write, but those who cannot learn, unlearn and relearn.” Fortunately, the construction industry has the capacity to learn, unlearn and relearn in the way it has been constructing, de-constructing and re-constructing. Literally. It resisted the change till now only because it did not really see the need to. But as everyone will agree hard times will pass away not before imparting some wise lessons. That gives hope to firms like Arqonz.
