“Rise of E-commerce Could Spark Social Issues, Warns Union Minister”
Commerce Minister Piyush Goyal recently highlighted certain concerns regarding the fast growth of e-commerce in India. According to data shared by the Minister, the online retail sector is increasing at an annual rate of 27%, meaning the industry will double in size every three years.
While acknowledging technology's role in empowering consumers, Goyal stated that policymakers must ensure widespread benefits of digital transformation. He noted that e-commerce platforms are gaining significant traction in high-margin consumer goods segments traditionally served by small retailers. This could disrupt the livelihoods of millions of neighborhood shop owners.
The Minister drew attention to possible issues of predatory pricing by some major e-commerce players. He argued that huge losses posted by one prominent platform did not necessarily translate to greater economic contribution. There is a need to carefully assess the impact of e-commerce on various stakeholders, including offline retailers.
Goyal further highlighted the diminishing presence of mobile stores over the past decade. He questioned if only a few global brands will handle mobile and accessories sales going forward. The comments implied the need to facilitate a level-playing field for all types of retailers.
The sharp focus of online giants on high-growth categories poses risks of disproportionately affecting small brick-and-mortar businesses. Policymakers must find a balanced approached that allows both traditional and emerging retail models to thrive while also safeguarding various local economies and livelihoods. With insights around such complex dynamics, the debate on shaping India's e-commerce policy will surely continue.
