The Union government’s decision to finalise the long overdue national e-commerce policy is a welcome move, which will guide one of the fast-growing sectors of the Indian economy.
The e-commerce sector has come a long way after building the confidence of perennially distrustful Indian consumers. By offering huge discounts, the e-commerce sector has gradually transformed from a $14-billion market in 2014 to $70-billion in 2022 — a growth of five times affecting fortunes of hundreds of brick-and-mortar outlets.
According to a report by Deloitte Touche Tohmatsu India, the e-commerce sector is expected to grow five times more in the next seven years to touch $325-billion market size or 5.42 per cent of the projected GDP size of $6 trillion in 2030. To put it into perspective, it is nearly equivalent to the economy of Pakistan. In comparison to the size of the Indian GDP, the e-commerce market was 0.7 per cent in 2014 and 1.87 per cent in 2022.
In spite of occupying a meager 1.87 per cent of the overall retail market, the e-commerce sector has emerged as a threat to the Indian retail shops and forced them to change their traditional way of functioning. When it grows to command a sizeable market share of nearly six per cent, the e-commerce sector could be disruptive and require proper regulations for a harmonious growth.
The proposed draft is likely to address the concerns of small traders and ensure data security, promote infrastructure development, and stimulate export promotion through e-commerce. It is also expected to strengthen rules to protect the interests of consumers.
The e-commerce policy has also become essential after enactment of the Digital Personal Data Protection Act which seeks to secure people’s information.
The e-commerce companies have a huge volume of consumer data, which gives them an enormous edge over physical stores in terms of attracting people to shop with them. The current e-commerce policy must take steps to give a level-playing field to e-commerce and physical stores.
