Are all online commerce companies flat? Read Here

E-commerce in India is fastest growing in the beauty and wellness sector, where Quantified Commerce build vertically-integrated brands that bring consumers unique high-quality content and products that are manufactured in it’s own local factories that operate at international GMP standards.

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Many emerging companies in technological innovation and online commerce are flat. Well, not literally. But, their management organization is taking on a more horizontal approach, as opposed to a traditional vertical hierarchy. This organizational model is beneficial in many ways, but countries like India are unaccustomed to this managerial style, which can be challenging for flat organizations overseeing business operations there. Quantified Commerce seeks to give their Indian employees more equal footing in the company and a great sense of responsibility within their flat organization model.

Currently, India is in a digital technology and E-commerce boom. It is emerging as an investment hub in the aforementioned spaces, as India’s population rapidly gains access to the Internet and smartphone technology across the country. According to Morgan Stanley, E-Commerce in India was just about 2% of the overall retail market in 2016, at about $15 million. By 2026, online retail is expected to account for 12% of the overall retail market at about $200 billion. That is a growth of over 1,200%!

E-commerce in India is fastest growing in the beauty and wellness sector, where Quantified Commerce build vertically-integrated brands that bring consumers unique high-quality content and products that are manufactured in it’s own local factories that operate at international GMP standards.

A lot of that growth stems from the low-cost high-speed Internet access expanding its way across the country. This is coupled with the fact that Indians are becoming increasingly smartphone-savvy. As of right now, there are about 300 million smartphone users in the country. By 2022, there expected to be an additional 176 million new smartphone users, for a total of 476 million. That is over 100 million more people than the entire population of the United States. Investors are obviously excited by this news as it represents a lot of opportunity. But, as many emerging tech startups run a flat organization model, they will encounter that much of India’s corporate cultural ethos is stuck in a vertical hierarchy mindset.

There are many benefits to the flat organization. Flat organizations work best in fast-changing environments and for companies that focus on innovation, all which ring true for digitally native vertically integrated brands. In flat organizations, costs are reduced by cutting out middle-managers. This leads to a decrease in bureaucracy and allows for better decision-making among employees. Since individuals don’t have a supervisor constantly looming over their shoulder in this setting, they work as their own managers. With this added air of responsibility, people are more likely to be held accountable for their tasks. Also, in this type of setting there is great collaboration between executives and employees. These companies are also typically associated with a low power distance, which deals with the unequal distribution of power in a organization, and to the degree with people with lower power accept this. India has one of the highest power difference indexes (PDI) in the world, at a PDI of 77. In comparison, the United States has a PDI index of 44. A higher PDI is tends to fit into a traditional vertical hierarchy more comfortably. Indians typically expect a more formal relationship between subordinates and managers. They may be more comfortable being assigned tasks rather than setting their own. But, Quantified Commerce’s, Indian employees are treated equally and expected to set their own tasks, and their employees are comfortable with a flat management model.

We spoke to Ryan Andreas, co-founder of Quantified Commerce, about how they manage to overcome the challenges that come with running a flat management model in a country that is overwhelmingly accustomed to a vertical hierarchy. “ At Quantified Commerce, our Indian employees set their own KPIs (Key Performance Indicators), which are approved by us, and then they’re held accountable for getting them done on time,” Andreas says. “Despite the prevalence of vertical management  in India, we’ve managed to instill the values of flat organization in our teams. Flat management works in India, you just need the right approach.”

Quantified Commerce has seen impeccable success over the last four to five years, with a growth rate of 100 to 300% per year. This is, in part, thanks to its open collaborative managerial style, and it’s dedication to constantly invest in the education of its talented employees. “Our employees are encouraged to speak up and their voice is respected,” Andreas said. “Typically, in a vertical hierarchy you don’t see that. Employees answer to their immediate managers, at Quantified Commerce, employees answer to their team, and most importantly, themselves, which we believe instills a greater sense of pride and accomplishment in their work.”

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