The booming E-commerce Industry:
- The Indian e-commerce industry has been on an upward growth trajectory and is expected to surpass the US to become the second-largest e-commerce market in the world by 2034.
- The E-commerce market is expected to reach US$ 200 billion by 2027 from US$ 38.5 billion in 2017, an increase of over 5 times.
- India’s e-commerce market has the potential to grow more than four folds to US$ 150 billion by 2022 supported by rising incomes and surge in internet users.
- Online shoppers in India are expected to reach 220 million by 2025.
- 100% FDI is allowed in B2B e-commerce and 100% FDI is permitted under automatic route for marketplace model.
- A single brand retail company can now start selling to the Indian consumers via an online platform and open up a physical store later (within a period of two years).
These skyrocketing facts and figures are pinting to the fact that India is leading the rest of the world towards a digitally empowered era.
Replacement of manual and mechanical forms of administration by E-governance, physical banking by Net-banking, the proliferation of smartphones and the growing internet user base with it, rapidly growing digital currency, a growing logistics infrastructure has boosted the country’s journey towards the fastest growing digital economy by 2025.
Digital facilitation of almost every essential household and the corporate task has proved to be a catalyst for further acceleration of overall economic development supported a favorable consumer base, demographics and policy reforms.
The role of Internet in Nation Building:
- Mass Employment Generation: E-commerce is expected to create more than a million jobs by 2022, not just in the corporate industry but also the various services chains like warehousing, logistics, and transportation.
- Help in the influx of foreign exchange by Foreign Direct Investment Inflows and thereby promoting domestic products in the global market. This will ultimately boost the confidence of foreign MNCs and Investors in the Indian marketplace and infrastructure.
- Will motivate the IT and start-up culture in India and help local businesses to go on the international platform. Hugely benefit entrepreneurs and self-employed businessmen in the long term
Challenges Faced :
- Lack of Reliable Infrastructure: Internet facilities and allied services are the first stones in the path to e-commerce coverage across the Indian subcontinent. However, this is the aspect where India lags behind the majority of the technologically advanced countries like Singapore, China, and the US. The internet penetration of PCs, tablets, and phones is low.
- Privacy and Security Concerns: Absence of strong cyber laws and excessive exploitation of one’s privacy on social media is posing as a hurdle in the organic growth of e-commerce. Widespread issues such as individual property rights, content regulation and data protection against theft still remain unaddressed.
- Digital Illiteracy and toxic consumer mindset: The incessant export of genius young minds with extraordinary talent in STEM fields to foreign countries have hindered the growth of the IT industry of India. This constant brain drain has negatively impacted the growth of digital literacy in the forthcoming generation.
- Furthermore, an average Indian consumer does not have the ability to comprehend the various benefits of e-commerce services nor does he know how to access all the facilities provided by digital means. To earn the complete trust of an Indian consumer is an arduous job in itself.
A holistic e-commerce framework should encompass the following:
- A robust physical and digital infrastructure;
- Enhancing the logistics infrastructure;
- Enabling network infrastructure and access;
- A robust data protection framework;
- Thrust to ‘Make in India’;
- A conducive environment for cross border e-commerce; and
- Enabling ecosystem for domestic start-ups.