How Distant is E-Commerce?

Discounts and offers have become a part of the strategies used by e-commerce firms during festivals. In the US, consumers wait until Black Friday to shop at discounted prices. Even in India now, e-commerce companies conduct ‘Great Indian Festival’, ‘Big Billion Days Sale’ etc. Where exactly do micro and small enterprises figure out in this magnanimous market of e-commerce? India is becoming globally recognized in the digital revolution. As a result, small sellers and consumers have become accustomed to online shopping. Compared to G-20 countries, however, India seems to be far behind. Micro and small entrepreneurs do not have the prerequisites for online vending. They do not possess their own business website or online point of contact. Hence, micro and small entrepreneurs depend on e-commerce companies. In order to survive the fierce competition, quintessential to e-commerce platforms, the product is sold at lower prices. On the flipside, this is beneficial to these enterprises as they get access to bigger markets.

Aside from increasing the number of customers, e-commerce also has other benefits. Many companies focus on improving the quality of their products in order to survive and stand out in the competition. Being involved in e-commerce increases their credibility and also helps them raise capital and get loans. There are also government e-commerce websites like ‘GeM’ and ‘ONDC’ for small entrepreneurs. Thus, it is not impossible for entrepreneurs to join the online market. In the current scenario, two types of micro-enterprises are seen; viz. affiliated and non-affiliated with e-commerce companies. According to some reports, micro entrepreneurs stay away from e-commerce because they do not know exactly how to register and sell. It is true that aspiring professionals need guidance and support to grow their business on e-commerce, however the fear that the growing popularity of e-commerce threatens the very existence of businesses may be unfounded. Even today, if we consider only the grocery store, 90 percent of the grocery is supplied by nearly nine crore small grocers.

It is believed that there are a total of 630 lakh micro enterprises in India. By around 2027, 60 lakh enterprises are hoped to be connected to e-commerce platforms. But the business scale of many micro-enterprises is not large enough for e-commerce. Although there are rapid advancements in technology, many entrepreneurs are content to do business for years due to a loyal customer base, support from fraternity, etc. Especially for retailers, shopkeepers, businesses in the service sector, e-commerce is not useful. Therefore, even though e-commerce is gaining popularity in India among the working class and middle class in urban areas, there is still a huge consumer base in rural areas yet to be tapped. Hence, the importance of retail grocers and other similar businesses that provide services and goods to this class will remain unchanged even in the near future.

This article by Dr. Lalitagauri Kulkarni was originally published in Marathi in Sakal Newspaper on November 28, 2023.