A business concept known as “e-commerce” enables businesses and consumers to buy and sell goods through the Internet.
The Indian e-commerce market is anticipated to increase from US$ 38.5 billion in 2017 to US$ 200 billion by 2026, driven by expanding smartphone penetration, the rollout of 4G networks, and rising consumer income.
India’s e-commerce revenue is anticipated to rise at the greatest yearly pace in the world, 51%, from US$ 39 billion in 2017 to US$ 120 billion in 2020.
By 2034, it is anticipated that the Indian e-commerce market would overtake the US to overtake it as the second-largest e-commerce market in the world.
Advantages of e-Commerce
E-commerce helps vendors to become closer to customers, which boosts productivity and creates ideal competition. Also, the buyer has a variety of merchants from which to chose and may purchase the best things for their needs, tastes, and budget. Also, shoppers now have constant access to online retailers.
E-commerce also significantly lowers the cost of transactions for customers.
One of the rapidly expanding commercial channels for the transnational exchange of goods and services is e-commerce.
With few investments, it offers a greater reach and reception on the worldwide market. It makes it possible for both buyers and sellers to reach a worldwide market. Geographical limitations and difficulties are eliminated or much diminished.
This e-commerce technique significantly shortens the product distribution chain by interacting directly with ultimate customers. There is established a clear and direct line of communication between the product or service provider and the ultimate consumer. In this method, goods and services are developed to suit the specific tastes of the target market.
As e-commerce allows for the creation of a single store to meet all of a customer’s business needs, clients may find items with ease.
Business ease: It makes beginning and running a business straightforward and easy.
The development of the e-commerce industry has the potential to improve employment, export income, tax collection through excheques, and long-term consumer satisfaction.
The micro, small, and medium businesses (MSME) in India have been directly impacted by the e-commerce sector, which also has a positive cascading effect on other industries by offering means of finance, technology, and training.
Disadvantages of e-Commerce
E-commerce businesses are less accountable, and the quality of the products may or may not satisfy client expectations.
Information technology and network connection are extremely important. Unpredictable consequences on overall operations might result from mechanical breakdowns.
E-commerce transactions are not currently regulated, as there are no clear laws in place either locally or internationally to do so.
The client may occasionally lose their sense of privacy, culture, or economic identity.
The possibility of fraudulent financial transactions and the loss of private financial data exists.
As there is no regulation on the Internet and no borders, preserving intellectual property rights (IPR) online is becoming more and more important. The abuse of trademark rights is one of several important IPR concerns that are now present.
Government Initiatives Regarding e-Commerce in India
- A draught national e-commerce policy that addresses six major issues of the e-commerce ecosystem, including e-commerce marketplaces, regulatory issues, infrastructure development, data, stimulating domestic digital economy, and export promotion through e-commerce, was prepared and made public in February 2019.
- The Department of Commerce organised an exercise and created a Task Group and Think Tank under the name “Framework for National Policy on e-Commerce” to discuss the difficulties India has in the field of the digital economy and electronic commerce (e-commerce).
- Prepaid Payment Instruments (PPIs) including digital wallets, prepaid cash coupons, and prepaid phone top-up cards will now be able to “interoperate,” according to the Reserve Bank of India (RBI). Moreover, the RBI has ordered businesses and financial institutions to use the Unified Payments Interface to connect all know-your-customer (KYC)-compliant prepaid payment instruments (PPIs), such as mobile wallets, to one another (UPI).
- DIPP’s FDI regulations for online commerce: The Government extended the limit on foreign direct investment (FDI) in the e-commerce marketplace model for up to 100% in order to encourage the participation of foreign firms in the industry (in B2B models).
- In order to provide a cashless, paperless, and transparent payment system for a variety of services, Government e-Marketplace (GeM) and Union Bank of India signed a Memorandum of Understanding (MoU) in October 2019.
- India’s government is making significant investments to build up a fibre network for 5G, which would increase e-commerce there.
- To deliver internet connections to 150,000 gramme panchayats, the government has committed Rs 8,000 crore (US$ 1.24 billion) in the Union Budget for 2018–19.
E-commerce has grown to play a significant role in several international discussions, including the WTO, the BRICS, the Regional Comprehensive Economic Partnership (RCEP), and others.
International trade, domestic trade, competition legislation, consumer protection, information technology, and other concerns continue to be challenges for e-commerce. It is important to regulate this sector since it is expanding and has a lot of interest from both domestic and foreign companies. This regulation should take into account the interests of both business owners and consumers. A friendly atmosphere and an even playing field should be promoted.
Creating a thriving local sector is another important consideration for policymakers. To accurately represent India’s stance in local, international, and multilateral forums, a complete strategy is crucial.