India Calls Rapid Growth of E-commerce "Concerning" | Vantage with Palki Sharma
Summary
TLDRIndia's Commerce Minister raises concerns over the rapid growth of e-commerce, fearing social disruption and the impact on local businesses. He criticizes e-commerce giants like Amazon for predatory pricing, which could harm small retailers. With only 4.3% of Indians shopping online, the market is poised for growth, but the government is exploring ways to regulate it, including the creation of an open-source marketplace to foster fair competition and protect small businesses.
Takeaways
- 🛍️ The rapid growth of e-commerce in India is seen as a concern by the Commerce Minister, who fears it could lead to social disruption and a lack of pride in the market becoming part of the e-commerce network.
- 🍽️ The rise of cloud kitchens is highlighted as a potential health impact, suggesting that it could lead to a more sedentary lifestyle with people becoming 'couch potatoes'.
- 🏪 The minister raises concerns about the impact of e-commerce giants on local businesses, suggesting that they are disrupting the market and edging out small retailers.
- 📉 The Commerce Minister accuses Amazon of predatory pricing, pointing to the company's reported losses as evidence of their strategy to undercut the market and gain customers.
- 📊 E-commerce platforms in India are not allowed to sell directly but are instead marketplaces; however, the minister suggests that they engage in direct selling through shady networks.
- 💰 The minister presents data on Amazon's losses, implying that the company's business practices may be unsustainable and harmful to the Indian economy.
- 🌐 The e-commerce market in India is significant and projected to grow, with the potential to become the third-largest online market globally by 2030.
- 📈 Despite the growth, only a small percentage of the Indian population shops online compared to other countries, indicating there is still room for expansion.
- 🛑 The government's stance is not to halt e-commerce but to regulate it for fair pricing and organized growth.
- 🏢 The pandemic has accelerated the adoption of e-commerce in India, with many turning to online shopping out of necessity.
- 🤝 The government's attempt to create an open-source, nonprofit marketplace (ONC) to offer an alternative to major e-commerce platforms has had limited success, indicating the dominance of existing players.
Q & A
What is the primary concern expressed by India's Commerce Minister regarding the growth of e-commerce?
-The Commerce Minister is concerned about the potential social disruption and negative impact on local businesses due to the massive growth of e-commerce, which could lead to a lack of social interaction and predatory pricing practices.
What does the term 'cloud kitchens' refer to in the context of the script?
-Cloud kitchens refer to commercial kitchen spaces that are used by multiple food businesses to prepare meals for delivery, often without a physical dining area for customers.
How does the minister view the potential health impact of the increasing reliance on e-commerce for food and shopping?
-The minister believes that the reliance on e-commerce for food and shopping could lead to a sedentary lifestyle, turning people into 'couch potatoes' who spend more time at home watching content and ordering online rather than engaging in physical activities.
What is the minister's concern about the impact of e-commerce giants on small retailers?
-The minister is concerned that e-commerce giants are disrupting the market and edging out millions of small retailers, potentially leading to predatory pricing and a loss for the local economy.
What is predatory pricing and how is it related to the discussion in the script?
-Predatory pricing is a strategy where companies intentionally sell products at a loss to drive out competition and attract new customers. The minister suggests that e-commerce platforms like Amazon might be using this strategy, as evidenced by their reported losses.
What is the current market share of Amazon and Flipkart in India's online market?
-Flipkart holds 48% of India's online market, while Amazon accounts for 26%, indicating a duopoly that controls three-quarters of the market.
What is the projected value of India's e-commerce market by 2030?
-The e-commerce market in India is projected to reach $325 billion by 2030, potentially making India the third-largest online market.
What percentage of India's population currently shops online?
-Only 4.3% of India's population shops online, which is significantly lower compared to other countries like China and the UK.
What was the government's attempt to offer an alternative to e-commerce giants like Amazon and Swiggy?
-The government set up an open-source nonprofit marketplace called ONDC (Open Network for Digital Commerce) to provide a transparent and cost-effective alternative without predatory pricing.
How does the script suggest addressing the concerns raised by the Commerce Minister about e-commerce in India?
-The script suggests that more competition in the market and fair pricing regulations by the government could address the concerns, while also considering the adaptation of small retailers to the online shopping trend.
What is the significance of the 'One Tree' project mentioned in the script?
-The 'One Tree' project is an initiative aimed at combating climate change by encouraging the planting of trees, symbolizing a collective effort to create a sustainable future for humanity and the planet.
Outlines
🛒 E-Commerce Concerns in India
India's Commerce Minister expresses concern over the rapid growth of e-commerce, fearing it could lead to social disruption and negatively impact local businesses. He criticizes the potential health effects of a sedentary lifestyle driven by online shopping and food delivery, leading to a lack of social interaction. The Minister also accuses e-commerce giants like Amazon of predatory pricing, suggesting their deep discounts and market dominance are not sustainable and harm small retailers. Despite e-commerce's current small market share in India, it's projected to grow significantly, raising questions about regulation and the future of traditional retail.
🌐 Alternatives to Big E-Commerce Platforms
The Indian government's attempt to provide an alternative to major e-commerce platforms like Amazon and Flipkart is discussed through the example of ONC, an open network for digital commerce. ONC aims to offer transparency and fair pricing, contrasting with the alleged predatory practices of established platforms. However, the adoption of ONC is significantly lower compared to its competitors, indicating a long road ahead for such initiatives. The paragraph also touches on the broader issue of market duopoly and the need for more competition to ensure a fair market. It raises concerns about the future of small retailers and the potential societal shift towards a more sedentary lifestyle due to the convenience of e-commerce.
Mindmap
Keywords
💡E-commerce
💡Cloud kitchens
💡Predatory pricing
💡Local businesses
💡Social interaction
💡Amazon
💡Open Network for Digital Commerce (ONDC)
💡Couch potatoes
💡Retail market
💡Competition
Highlights
India's Commerce Minister expresses concern over the rapid growth of e-commerce, fearing potential social disruption.
E-commerce is accused of turning people into 'couch potatoes', impacting social interaction and local businesses.
Cloud kitchens are highlighted as a new trend, potentially leading to a sedentary lifestyle and reliance on home deliveries.
The Minister raises the issue of predatory pricing by e-commerce giants, such as Amazon, to gain market share.
Amazon's reported losses in India are scrutinized as a possible sign of predatory pricing strategies.
E-commerce platforms in India are not allowed to sell directly but are suspected of doing so through indirect means.
The Indian e-commerce market is valued at nearly $70 billion and is projected to reach $325 billion by 2030.
Only 4.3% of India's population shops online, compared to 25% in China and 23% in the UK.
The pandemic has accelerated the adoption of e-commerce in India as a primary shopping option.
The Indian government is seeking to regulate e-commerce to ensure fair pricing and protect small retailers.
ONC (Open Network for Digital Commerce) is introduced as a government initiative to provide an alternative to major e-commerce platforms.
The current e-commerce market in India is dominated by a duopoly, with Flipkart and Amazon controlling 74% of the market.
The Minister's concerns include the potential loss of millions of jobs in small neighborhood shops due to e-commerce dominance.
The need for more competition in the e-commerce market to prevent market manipulation and ensure fairness.
The government is urged to find solutions to support small retailers in adapting to the online shopping trend.
Firstpost's commitment to delivering unfiltered and unbiased news to its 5 million strong audience.
One Tree for Humanity, a news18 Network initiative emphasizing environmental responsibility.
Coverage of the T20 World Cup and its significance in the sports news landscape.
Transcripts
imagine you're looking to buy something
maybe a gadget or a kitchen utensil or a
piece of clothing what's the first thing
you would do probably go to an
e-commerce website your Amazon's or
Minas it's the default reaction for most
of us it tells you how common online
shopping is but India's Commerce
Minister says that's not necessarily a
good thing he's called it a matter of
concern just think about it are we going
to cause huge social
disruption with this massive growth of
e-commerce and I don't see it a matter
of Pride that half our Market could
possibly become a part of the e-commerce
Network 10 years from
now it's a matter of concern Cloud
kitchens what is the impact of these
Cloud kitchens very nice four or five
chefs will get a work there and four or
five delivery boys of course we'll end
up becoming a country of couch potatoes
watching OT and having food at home
every
day the minister basically raised two
problems number one the health impact he
says Ecommerce is turning us into couch
potatoes we're watching content on Ott
ordering food from home and even
shopping from our couch so the minister
asks where is the social interaction
what happened to going out for dinner or
physical shopping which brings us to
concern number two the impact on local
businesses push goel says e-commerce
Giants are disrupting the market they're
edging out millions of small retailers
and he specifically targeted Amazon
listen to this when Amazon says we're
going to invest a billion dollars in
India and we all celebrate we forget the
underlying story that that billion doar
is not coming in for any great service
or any great investment to support the
Indian economy they made a billion
dollars loss in their balance sheet that
year they have to fill in that loss if
you make 6,000 CR loss in one year does
that not smell of predatory pricing to
any of
you what did that loss come on they are
after all a e-commerce
platform some background first Global
e-commerce Giants cannot sell directly
in India they cannot stock or sell
anything they can only let others sell
on their platform basically they're a
Marketplace but the reality is quite
different these platforms do sell
directly using Shady networks have you
wondered how Amazon or flip cart are
able to give such steep discounts or why
products always seem cheaper online the
minister says it could be predatory
pricing and what is that well companies
purposely charge less for a product yes
they will incur a loss but they will
also add plenty of new customers so the
tradeoff is worth it or so they say the
Commerce Minister also came with numbers
he says Amazon reported 6,000 CR rupees
in losses that's $714 million us which
is a bit high for a Marketplace company
so the theory is that this loss is
because of predatory pricing of course
Amazon will deny all of this but it
gives us a chance to look at the
e-commerce Market in India it's worth
almost $70 billion already 770 billion
which is 7% of the total retail Market
by the year 2030 it is projected to
reach
$325 billion now if this projection
holds $325 billion India will become the
third largest online
market and what about the users how many
Indians actually shop
online just 4.3% of the population that
is all compare that to other countries
in China it is 25% in the UK it is 23%
in India only 4.3% of the population
shops online but the bottom line is
quite clear India's e-commerce industry
is still growing which is why The
Minister's comments are strange does the
government want to put the brakes on
e-commerce well not quite push
accepted that e-commerce is here to stay
but he wants it to be more organized he
wants the pricing to be
fair well that's actually up to the
government because consumers will always
prioritize two things one is low price
and second comfort right now e-commerce
offers both and the pandemic is also
responsible for this change most Indians
were locked down for more than a year so
they discovered e-commerce in fact it
became their only option in a lot of
cases to buy groceries to buy medicines
and to buy most essential Goods the
pandemic may be behind us but this
practice has stayed so the onus is now
on the government how can they regulate
e-commerce in
India well they did try we saw an
attempt in late 2021 the government set
up an open source nonprofit Marketplace
onc open network for digital Commerce
onc the idea was quite simple offer an
alternative to the likes of Amazon or
swiggi or
zato that was what they were trying to
do no hidden costs no predatory prices
everything was supposed to be
transparent and how is onc doing well
they get around 60,000 food orders per
day 60,000 per day swiggy and zomato get
2 million each
so there's a long way to go but
ultimately there's only one solution we
need more competition because right now
it is a duopoly Flipkart makes up 48% of
India's online Market Amazon makes up
26% that's two companies with three qus
of the market so it's easier for them to
manipulate it a more crowded Market
would certainly be fairer but even then
some of The Minister's concerns remain
laziness for sure but also the issue of
small retailers we're talking about
Millions of small neighborhood shops
entire families depend on them so if
e-commerce takes over what will these
people do will they adapt to the online
shopping Trend or will they be wiped
out we say it's good that the government
is asking the right questions but I'm
afraid the answers too must come from
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