Growth of e-commerce in India ‘matter of concern, nothing to be proud of’, says Piyush Goyal

Growth of e-commerce in India 'matter of concern, nothing to be proud of', says Piyush Goyal



Raising concerns over the rapid expansion of e-commerce firms in India, Union Commerce Minister Piyush Goyal on Wednesday described it as a “matter of concern” rather than an achievement.

Speaking at an event for the launch of a report on the ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India’, Goyal raised questions about the potential social disruption that might follow this surge.

“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 remarked.

Also Read: Death of the kirana store: Will quick commerce quicken it?

Meanwhile, the report shows online vendors have generated 15.8 million jobs in India, including 3.5 million for women, with about 1.76 million retail enterprises participating in e-commerce activity.

A nation of couch potaoes?
Goyal also expressed concerns regarding the rapid expansion of e-commerce in India, warning that it could lead to a more sedentary lifestyle among the population. He highlighted that the convenience of online shopping, combined with the increasing popularity of OTT platforms, might encourage people to stay indoors, thus reducing social interactions.

He expressed concerns about the changing consumer behavior, especially among the youth. “Of course, we’ll end up becoming a country of couch potatoes, watching OTT and having food at home every day,” he warned. Goyal stressed that activities like dining out or meeting friends for coffee are crucial for human development, fostering connections that are at risk of diminishing as more people turn to online solutions for their needs.

Edging out smaller players
Goyal also highlighted the need for a thoughtful approach to the role of e-commerce in India. “E-commerce has a role, but we have to think carefully about what that role is and how it can be more organized,” Goyal stated. He also raised concerns about the pricing strategies used by some e-commerce firms, questioning, “Is predatory pricing policy good for the country?”

Goyal emphasized the need for a balanced evaluation of e-commerce’s effects, particularly on traditional retail sectors such as restaurants, pharmacies, and local stores. “I’m not wishing away e-commerce—it’s there to stay,” he remarked, stressing that its growth should be assessed dispassionately to understand its broader implications.

Also Read: Online vendors generated 15.8 million jobs in India, shows report

“E-commerce is eating into the small retailers’ high value, high margin products which are the only products by which they survive,” Goyal added.

The minister made it clear that while he acknowledges the permanence of the e-commerce industry, it is crucial to assess its broader impact. He pointed out that the industry does not dominate every aspect of retail but emphasized that only a small portion of the population currently uses online platforms to purchase essential items like food and groceries.

In the race for market share, with a growth rate of 27 percent per year, concerns were raised by Piyush Goyal about the potential disruptions that could be caused for the 100 million small retailers across the country who also serve the market. Support was expressed by Goyal for the offline retail channel in this context.

Goyal questioned the excitement surrounding Amazon’s announcement of a billion-dollar investment in India, urging a closer examination of the underlying implications. “When Amazon says we are going to invest a billion dollars in India and we celebrate, we forget the underlying story that this billion dollars is not coming for any great service or investment to support the Indian economy,” Goyal remarked.

He pointed out that Amazon reported a billion-dollar loss on their balance sheet that year and suggested that such losses could be indicative of predatory pricing practices. “If you make Rs 6,000 crore loss a year, doesn’t it sound like predatory pricing to you? They are, after all, an e-commerce platform, and they are not legally allowed to do B2C. However, the reality is all of you buy on these platforms. How are they doing it? Should it not be a matter of concern for us?” Goyal asked.

The minister also expressed concern over the imbalance between small traders and large retailers, highlighting the decline of small mobile stores. “How many mobile stores do you see now on the corner? And how many were there 10 years ago? Where are those mobile stores? Will only Apple or the large retail sell mobile phones and their accessories?” he questioned, underscoring the challenges faced by small retailers in the current market landscape.

Goyal’s comments reflect a broader concern about the balance between technological advancement and social stability, urging a careful approach as the e-commerce sector continues to expand in the country.



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