e-Commerce in India – UPSC GS3

India’s e-commerce sector is set to expand into an oligopoly with the entry of Reliance, Tata from a near-duopoly of Amazon and Walmart-owned Flipkart at present.

An oligopolistic market can see its players join hands to form a cartel and act against consumer interests.

There are oligopolies that exist in other industries; for example, cement, where producers have been punished by the Competition Commission for operating illegal cartels.

Increase Competitiveness of Indian goods: They offer discounted prices to small sellers for their raw material and lower their cost of production.

Increase Exports: These platforms have increased the reach of small businesses nationwide and even helped them address export markets.

Efficient service delivery: For customers, they have made product returns hassle-free and improved product quality and variety.

Improved Logistics: They have revolutionized the country’s logistics industry and supply chains.

Employment Generation: Their contribution to employment generation is now significant.

Increased Disbursal income for poor households: The lower prices that e-commerce companies offer is an indirect real income increase, especially for our relatively low-income households.

Encourage market entry and ensure that there is no excessive regulation.

More e-commerce companies entering the market should result in more choices for small sellers in terms of the platforms they want to list on, depending on the listing fees, commission, and so on.

Further, many of India’s small-business owners should be gainfully employed elsewhere; large numbers are into subsistence entrepreneurship because of a lack of jobs.

E-commerce platforms cannot engage in such price discrimination, like any other retail shop. So, they should be allowed to offer discounts for limited periods on specific goods.