DBT Bureau
Bengaluru, 21 August 2024
Rapid penetration of ecommerce firms across the country with rising adoption among users is a matter of concern for a country like India as it may lead to business disruption for small retailers apart from promoting sedentary lifestyle among Indian youth, said Union Commerce Minister Piyush Goyal on Wednesday.
Speaking at the launch of a report on the ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India’, Goyal also highlighted the predatory pricing followed by ecommerce giants in order to elbow out small players.
“When Amazon says we are going to invest a billion dollars in India and we all celebrate, we forget the underlying story that this billion dollars is not coming for any great service or investment to support the Indian economy. They made a billion-dollar loss in their balance sheet that year, and they had to fill in that loss,” Goyal said.
“If you make Rs 6,000 crore loss in one year, doesn’t that not smell like predatory pricing to any of you?” he questioned, highlighting the predatory pricing strategies followed by ecommerce players.
He also said that while e-commerce is growing at a rapid pace, with a 27% annual growth rate, this expansion could lead to significant social disruption, particularly for the 100 million small retailers.
“Are we going to cause huge, social disruption with this massive growth of e-commerce? I don’t see it as a matter of pride that half our market may become part of the e-commerce network 10 years from now; it is a matter of concern,” Goyal said.
“E-commerce is eating into the small retailers’ high-value, high-margin products, which are the only products by which they survive,” Goyal added.
He warned that rapid adoption of ecommerce players could lead to a more sedentary lifestyle among the population. The convenience of online shopping, combined with the increasing popularity of OTT platforms, might encourage people to stay indoors, thus reducing social interactions, he noted. “Of course, we’ll end up becoming a country of couch potatoes, watching OTT and having food at home every day,” Goyal said.
