Wednesday, 09 Oct, 2024
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Online marketplace giants like Amazon and Flipkart have generated a multitude of job opportunities across various sectors, including fulfilment centres, logistics, and partner networks. According to a report by the Pahle India Foundation, online vendors have increased employment by 54% and nearly doubled the number of women employed compared to their offline counterparts.
Invest India predicts a robust future for India's e-commerce sector, projecting it to soar to $325 billion by 2030. This growth aligns with the digital economy's expected expansion to $800 billion within the same period. With 881 million internet users, India holds the world's second-largest internet user base, positioning the country to become the third-largest online retail market by 2030. This expected surge is driven by the rapidly growing number of internet users and a thriving digital economy.
Last week, Union Commerce Minister Piyush Goyal raised alarms over predatory pricing practices by e-commerce companies and expressed concerns about the potential impact on small retailers in India. He warned of the "huge social disruption" that could result from the rapid growth of the e-commerce sector. However, he later clarified that India is not opposed to e-commerce firms but insists on fairness and honesty in their operations, emphasising that online businesses must ensure a "fair chance" for all competitors in the marketplace.
Several reports mentioned that the government is poised to address concerns about quick commerce companies potentially threatening local kirana stores, particularly within the framework of the draft Digital Competition Bill. The Ministry of Consumer Affairs has highlighted this issue to the Ministry of Corporate Affairs during discussions on the proposed legislation.
Amid allegations of predatory pricing by major e-commerce giants and concerns about their effect on India's offline retail sector, a recent study by Pahle India Foundation (PIF) offers a contrasting perspective. The study, released last week, found that the e-commerce boom since 2020 has had little impact on traditional retail. According to the report, less than 20 per cent of offline vendors reported a closure of a physical store in their area since 2020, with only 6 per cent attributing these closures to the shift in consumer behaviour towards online shopping.
The outlook for e-commerce in India is promising, with forecasts indicating an annual growth rate of 18 per cent through 2025. By 2030, India is projected to emerge as the third-largest consumer market worldwide, underscoring the vast potential for the sector. Innovations in technologies such as augmented reality, artificial intelligence, and machine learning are set to revolutionise consumer interactions with e-commerce platforms, paving the way for increasingly personalised and immersive shopping experiences.
Notably, e-commerce giants such as Amazon, Flipkart, and others have created numerous job opportunities across diverse sectors, including fulfilment centres, logistics, and partner networks. The Pahle India Foundation report reveals that online vendors have employed 54 per cent more individuals and nearly doubled the number of women compared to offline vendors.
NITI Aayog’s 2022 report highlights the significant role of retail in the gig economy, noting it as a key contributor to job opportunities for gig and platform workers. The report projects that gig jobs in India could expand from 7.7 million to 23.5 million by 2030. E-commerce behemoths like Amazon have already created over 1.3 million jobs in India, including 140,000 in 2022 alone.
Invest India forecasts that rural-centric e-commerce will become increasingly important, with significant demand expected from tier 2-4 towns and rural areas by 2026. This trend is supported by government initiatives and the growth of quick commerce. In the fiscal year 2022-23, the Government e-Marketplace (GeM) reached a record Gross Merchandise Value of $201.1 billion. The number of online shoppers in India is projected to grow substantially, with rural online shoppers expected to increase to 88 million at a compound annual growth rate (CAGR) of 22 per cent, and urban online shoppers projected to rise to 263 million, growing by 15 per cent from 2019 to 2026.
Following the rise of e-commerce, quick commerce is now encroaching on India’s extensive kirana sector, which encompasses nearly 12 million stores dealing in groceries, personal care, and other essentials.
In the last quarter of 2023, the slowdown among India’s 12 million kirana/ neighbourhood stores became more evident. During this time, quick commerce companies expanded their market share, extending beyond impulse items like soft drinks and snacks to include larger staple packs, such as those weighing 5 kg and 10 kg.
The rapid growth of e-commerce, expanding at 27 per cent annually, poses potential disruptions for India’s 100 million small retailers, according to the commerce minister. Goyal has raised concerns about the widening gap between small traders and large retailers, noting the decline in small mobile stores.
Since 2014, the Centre has launched several key initiatives aimed at boosting various sectors, including e-commerce:
The successful and timely execution of these programmes is likely to significantly support and expand the growth of e-commerce in India.
