E-commerce in India

Shopping and ecommerce

“You know, if you make a customer unhappy they won’t tell five friends, they tell 5000 friends.”

– Jeff Bezos, Founder & CEO of Amazon

The definition of e-commerce is a commercial transactions conducted electronically on the Internet. It may include the buying and selling of goods, transferring of money, etc. There are mainly four different types of sales scenario are

  1. Business-to-Consumer (B2C)
  2. Business-to-Business (B2B)
  3. Consumer-to-Business (C2B)
  4. Consumer-to-Consumer (C2C)

In the B2C type of selling there are open web stores for the consumers to visit and they can buy any product they like online. Then, coming on to the second type that is B2B where the selling of product by one business to another takes place. The third one is the C2B, where the consumers put up their products online and the other companies bid. In C2B, the consumer can chose any bidder whose price suits him. The last one is C2C where the consumers sell their products to the other consumers online.

E-commerce plays a very important role in our society and has gained a lot of importance. Nowadays, one can get a product delivered to their doorstep just by the click of a button and without facing any sort of inconvenience. It has made the lives of the people much easier and simpler. Now there is no need of facing the crowd of the markets and then looking for things, which we require. This has taken a great importance and has resulted into a great advantage to the consumers at large. The entire process has been simplified as the consumers can save a lot of time by just visiting the website and selecting the required items and simply placing an order. It has been very advantageous for the consumers hence its use is increasing day by day.

The e-commerce also affected India in many positive ways and has resulted in helping a developing country like India in growth. It has opened wide areas of opportunities for the people. There were many marginalized and financially unsound businesses, which were led by the immature entrepreneurs. As a result of the boom in e-commerce, they have got a great push in terms of better access by consumers. They have a great advantage of putting their product online and making it available for the people to purchase. In this way those budding businesses are not ruined and still tend to exist. Slowly and gradually they make a place and develop a standard in the Indian market. This would result into a boost to the Indian economy and many unemployed people would get employment, which ultimately would give a positive result in an increase in the gross domestic product of the country. Now it is much easier for a foreign company to invest in India and it had resulted in a greater flow of foreign direct investment as well.

According to an SBI Research report, the e-retailing, which comprises online retail and online marketplaces, has become the fastest-growing segment in the market having grown at a CAGR of around 56 per cent during 2009-14. The e-retail market was around USD 6 billion in 2015. “Our research indicates that only by considering the discount prices and that too for a select group of products, CPI inflation would be at least 25 bps lower that the actual CPI numbers,” SBI Research said in its Ecowrap report.[1]

Now coming on to the other side of the coin we realize that e-commerce like every other thing also has some disadvantages. Due to the rise of cyber crime in the country, uploading any information on the Internet is not safe nowadays. There are numerous hackers, who can easily access the private information of the users and misuse it in any way they want. One of such threats are paying or transferring of money online, as it may lead to leak of information for e.g. their account numbers and any other such personnel details. There are many people in India who do not prefer online shopping or using the Internet where they have to disclose their information and as a result this is limiting the scope of usage of e-commerce facilities. Another important factor is the trust of the consumers, which every e-commerce industry needs to take into account. There have been several instances in the past where one can see the sheer disappointment of the online consumers and reports have been filed for wrong delivery of the product or different products instead of the one ordered such as a brick instead of a cell phone. Such instances, tends to have a negative effect on the consumer body of the country by affecting the trust of the people on such e-commerce businesses. E-commerce business are also resulting as a threat to the small shopkeepers as their turnover has been decreasing at an increasing rate and the day is not far when they would not be in existence anymore. The foreign companies over the period of time have taken due advantage of this situation which have effected the Indian firms or the companies to a great extent, ultimately resulting in more number of foreign sellers than the native ones in the Indian market.

As a result e-commerce has resulted into being both good as well as bad for the economy of India.

[1] YourStory.com, “E-Commerce Is India’s Fastest Growing Sector — SBI Research” (2015), available at: <http://yourstory.com/2015/10/e-commerce-sbi/> accessed 11 January 2016.

Author: Sandeep Singh Grewal, pursuing B.B.A LL.B. (Hons.) from O. P. Jindal Global University (Jindal Global law School)

New Delhi, India