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HARVEERSIRHARVEER SINGH’S LECTURE SERIES

:E-Commerce Marketplace are allowed 100% FDI

TOPIC

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TO PONDER. “India’s online retail story is the story of the

future experiment in online retail in global south”. Elaborate.

What challenges are there for E-commerce in India? Explain significant transformations happening due to E-commerce.

The GOI came up with online marketplace related rules. What are the major rules? How these rules are going to impact the economy?

“Indian E-commerce story would be a carbon copy of Chinese story”. Critically Examine.

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LEGAL CHALLENGE Two retail associations representing brick-and-

mortar retailers, the RAI and the All India Footwear Manufacturers and Retailers Association, have approached the Delhi high court.

They argued that online retail companies have gained an undue advantage by being allowing access to FDI through which they are able to provide deep discounts that traditional retailers cannot match.

As of Now 100% FDI allowed in business to-business (B2B) e-commerce.

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MARKETPLACEMarketplaces essentially act as a platform connecting sellers and buyers.

It is an information technology platform run by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.

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MAJOR RULESA. The marketplace e-commerce companies

will be allowed to provide support services to sellers on their platform such as warehousing, logistics, order fulfilment, call centre and payment collection.

B. The warranty/ guarantee of products or services sold online will also be borne by the sellers.

C. A Single seller can not sale more than 25% the goods and services.

D. E-Commerce company can not influence the prices directly or indirectly.

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Thank You

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CHALLENGES FOR E-COMMERCEAmbiguous Laws related to

operations.Diversity (Language)Multiple Taxation…(Now we Have

GST)Small Businesses limited Access

to CreditPayment Instruments (Credit

Cards etc)

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Internet penetration to rise from 32% in 2015 to 59% in 2020. By 2030, India is projected to be a one-billion-person digital market.

According to the report from IAMAI, the country was estimated to have 371 million mobile internet users by June 2016. 

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2014 e-commerce sales were about $16 billion; by 2020, according to Morgan Stanley, a bank, the online retail market could be more than seven times larger ($112 Bn).

Indian E-Commerce are in Losses but Chinese story is an example. Chinese e-commerce grew by nearly 600% between 2010 and 2014. It is largely a domestic story.

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HARVEERSIRINDIA, A TOUGHER MARKET FOR E-COMMERCE THAN CHINA? Income per person, which in 2014 was

$1,570, could be twice that by 2025. Two-thirds of Indians are younger than 35,

and their phones give a huge number of them access to the internet. Only Access.

China was already home to many manufacturers looking for new ways to sell excess inventory.

The Infrastructure in India is not comparable to China.

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CREDIT AVAILABILITYSnapdeal announced that the

State Bank of India would approve loans of up to $37,000 instantly if it liked the look of the data that Snapdeal provided on the borrower.

MUDRA initiative by the govt is another push towards better credit in India.

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PAYMENT120m digital-wallet accounts, nearly six times India’s number of credit cards.

Snapdeal bought its own mobile payments company in April.

Amazon purchased an online-payments service in February.

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DELIVERY There are independent Delivery commpanies

like DELHIVERY. Flipkart began using Mumbai’s famous

network of dabbawallas, or lunch-delivery men, to drop off packages when they picked up customers’ lunch tins.

Amazon has a pilot programme that lets customers order groceries online and have them delivered from the nearest kirana.

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DIVERSIFIED MARKET Road construction, electrification and mobile

phones have stoked big increases in rural wages, and thus demand for goods

Flipkart says that about half its sales come from outside India’s big cities. Snapdeal claims more than 60%. It recently launched seven regional-language versions of its website

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WHAT ABOUT PROFIT?The most important metrics for E-

tailer company are not margins but the number of new customers, how often they shop, how much they buy and the speed of delivery.

If a company can take care of Product quality, Delivery, initial finances. It would succeed in India.

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IMPACT OF NEW RULES.. Biggest impact on Supply Chain

Ambitions.India has fragmented supply Chain. Not allowing foreign companies to own Inventory would do little to streamline the supply chain.

Companies become tangle of interlinked entities. Difficulty in doing business.

Price reversal: Initial rise of etail is due to Price. Controling price influence can slow the pace of etail rise.

Business Strategy Changes Possibility of More Flow of FDI.

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OFFLINE V/S ONLINE

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HARVEERSIRPROFOUND CHANGES DUE TO E-TAILING faster financial development. could help overcome India’s ropy

infrastructure and vast geography. (Rival firms/ Local Logistics solutions/Integrated market)

Retailing: Shopping malls and chain stores account for only about one-tenth of total retail sales. Already, the combined sales of India’s top three e-commerce sites, Flipkart, Snapdeal and Amazon, surpass those of the ten largest offline retailers

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FINAL WORD India is a better template for the e-commerce

battle in other emerging markets. Its logistical woes provide a test of firms’

ingenuity. If they find a way to deliver goods profitably

there, they may succeed elsewhere. If they falter, their stumbles will provide lessons.

E-commerce in India is a local battle for customers, but it is also a battle for the future of international retail.

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Thank You Again