During the launch of a report on the impact of e-commerce on employment and consumer welfare in India, Commerce Minister Piyush Goyal expressed his concern over the rapid growth of online retail in the country. He warned about the potential disruption it could cause to small retailers and questioned the projected dominance of online marketplaces in the next decade.
Goyal voiced his worries about the social disruption that could stem from the massive growth of e-commerce, stating that it was concerning rather than something to be proud of. He highlighted the fact that the e-commerce market was expanding rapidly, with the market size doubling every four years.
According to HSBC, India’s $1.1 trillion retail market witnessed e-commerce sales of less than $80 billion last year. The sector’s growth rate averages around 11%-12% annually, with quick commerce startups like BlinkIt, Swiggy Instamart, and Zepto projected to achieve significant sales growth this year.
Goyal raised concerns about e-commerce firms targeting high-margin products that small retailers rely on for their survival. He questioned the pricing strategies of major e-commerce players and highlighted the potential issues of predatory pricing.
The Commerce Minister criticized the billion-dollar investments made by Amazon in India, emphasizing the need to consider the impact on the Indian economy. He pointed out the losses reported by e-commerce platforms, suggesting predatory pricing practices.
Indian law mandates that e-commerce players like Amazon and Flipkart operate as pure marketplaces without owning the inventory they sell. Goyal reiterated his cautious approach towards e-commerce, acknowledging its role while calling for careful consideration of its implications.
