Covid-19 – an inflexion point for e-commerce
E-commerce has been growing rapidly in the world in recent years, taking progressively a larger share of total retail pie in each country. It is facilitated by digital technology and driven by demand with ease and convenience of customers to transact from the comfort and safety of their homes. It also provided tremendous economic growth in several countries like in China, buoyed by global exports, logistics and innovations. Covid-19, however proved an inflexion point and gave it a huge boost with lockdowns, contact restrictions and other confinement measures, disrupting status quo, sometimes creating tensions among affected stakeholders and ingraining new preferences among customers in the new normal.
CCI had undertaken a market study on e-commerce in April 2019. After stakeholder consultations for 9 months, including manufacturers, wholesalers, retailers, hotels, restaurants, payment systems, e-commerce platforms, and conducting market analysis, it released its report in January 2020 (https://rb.gy/qrwvnu). Several facets were brought out and mainly self-regulation was recommended.
Looking at the preamble of Indian Competition Law which mandates, the main objective is ‘economic development of the country’ with the other parameters -‘prevention of practices having adverse effects on competition, to promote and sustain competitionin the market, to protect the interest of consumers and to ensure freedom of trade’- all funneled into achieving it. The architecture of Competition Law is designed for growth, static and dynamic efficiencies in economy and consumer welfare.
CCI as the market regulator has been cognizant of the impact of Coronavirus pandemic on consumers and was among the first globally to issue a mature and nuanced advisory (https://bit.ly/3vtLL9n) to help businesses with needed coordination during the pandemic for maintaining supply lines and helping consumers. The same spirit has been evidenced in their several other orders showing understanding and accommodation. India is considered the fastest growing and most attractive e-commerce economy in the world. According to an IBEF report (https://bit.ly/35unB3X), India’s retail sector is estimated over US$ 883 Bn, ranked 5 th largest globally and expected to cross US$ 1.3 Tn in 2024. Of this, e-commerce is expected to reach US$ 111 Bn by 2024, with speedier growth in tier 2 and 3 towns, aided by explosive spurt in mobile and internet across the country. It is also providing new avenues of employment and innovation, thousands of start-ups are coming up in various segments, attracting massive infusion from global PEs and VCs, churning out a record 14 unicorns (likely 15 soon) in India during 5 months in 2021, despite the pandemic. It is also opening up avenues of access to newer markets, in India and overseas, to small businesses, handicrafts and services. E-commerce in medicines, pharma and healthcare, food and retail, travel, hail ride, fintech, home delivery of services (like electricians, plumbers, barbers, etc), OTT and in-home entertainment, are all proving the savior during Covid-19. In fact, the growth is mainly driven by the consumer preferences and situational needs.
Read More at www.financialexpress.com/opinion/covid-19-an-inflexion-point-for-e-commerce/2275034/lite/