The procurement of goods and services from the Government e-Marketplace (GeM) has crossed ₹1 lakh crore so far this fiscal, GeM CEO P K Singh said on Tuesday, adding that going by the trend, the numbers may reach ₹1.80 lakh crore by the end of this fiscal.
GeM is the official procurement portal of India that was launched in 2016 for online purchases of goods and services by all the government ministries and departments.
In 2021-22, the gross merchandise value or procurement was ₹1.06 lakh crore.
“Excellent news! @GeM_India is a game changer when it comes to showcasing India’s entrepreneurial zeal and furthering transparency. I laud all those who are displaying their products on this platform and urge others to do the same,” Prime Minister Narendra Modi said in a tweet.
The portal, which provides a wide range of products and services from office stationery to vehicles, has over 63,000 government buyer organisations, over 5.4 million sellers and service providers.
Singh said that the portal will become the “largest” e-commerce platform in India this fiscal, overtaking “Amazon and Flipkart also”.
The top five states buying from the portal include Gujarat, Uttar Pradesh, Maharashtra, and Madhya Pradesh.
Flash, an early-stage startup established by an e-commerce veteran to target frequent online shoppers, bagged $5.8 million in seed capital to defy a tough global funding climate.
The Indian startup created by engineer Ranjith Boyanapalli, a former executive at Walmart Inc.’s Flipkart, raised the funds from backers including Global Founders Capital Management and angel investors such as Binny Bansal and Sujeet Kumar.
Flash is creating a digital identity that power shoppers can use across retail sites. The service seeks to make order processing, communication with sellers and the use of rewards programs easier for frequent shoppers. The company will use the seed-round capital to develop the product, hire and expand globally.
“Power shoppers who shop online, order food or groceries as many as 400 times a year have a very broken experience, devoid of synergy,” Boyanapalli, 41, said in a video interview.
Users will be able to track and manage their past and current orders with various services in one location. Flash’s service will debut in India and expand to the US and Europe within 18 months.
The startup is targeting India’s 25 million frequent shoppers who account for over two-thirds of online-retail revenue, and it predicts the number of those heavy users to rise to 65 million by 2030.
India had the world’s third-largest online-shopper base of nearly 190 million at the end of 2021 and this number is set to triple to 650 million by 2030, Flash said in a release.
As e-commerce in India gathers momentum, technology in its varied dimensions remains the main driving force behind online marketplaces. Given the central role of technology in markets across the globe, industry analyst Benedict Evans has compared it to the solar system. Here, smartphones are akin to the sun while all other elements orbit around these smart devices.
Going by a Cisco study, India will be home to more than 800 million smartphone users this year with these devices driving 44 per cent of its total internet traffic. Moreover, the proliferation of smartphones will result in per capita data consumption touching almost 14 gigabytes in 2022 from 2.4 GB in 2017, the world’s highest growth rate, notes Cisco’s ‘Visual Networking Index’.
E-commerce to M-commerce
Considering the demographic dividend that accrues from India’s population of almost 1.4 billion, mobile apps hold immense significance in e-commerce, which could more accurately be called m-commerce or mobile commerce. Since apps offer ample opportunity for personalisation, they help e-commerce players understand consumers better while communicating more frequently with them and targeting these cohorts with relevant products according to their browsing history. Almost 25 million new smartphone users are being added every quarter in India, highlighting the importance of apps and m-commerce.
Meanwhile, driven by pandemic-linked tailwinds that nudged millions of consumers and retailers into embracing digital transactions, the country has now transformed into a mobile-first economy, as per the Annual Mobile Marketing Handbook 2021 from InMobi. Thanks to these trends, the country accounted for approximately 11.6 per cent of all app downloads around the world in 2021, according to a recent report by App Annie.
As per the same App Annie report, Indian consumers spend almost 5 hours a day on mobile apps. This can also be attributed to the emergence of m-commerce app categories such as gaming, health & fitness, entertainment, edtech, long- and short-form video content and hyperlocal delivery gaining prominence after the pandemic. The availability of these apps in vernacular languages also plays a pivotal role in empowering content creators and consumers.
Retailers need to jump on the bandwagon
There is no doubt the pandemic has transformed consumer habits, impacting marketing strategies in a major way. Consumer preference for mobile-first services seems poised to drive a transition towards an app-based economy.
With India transforming into a mobile-first economy, retailers who successfully deploy apps will make greater headway in the highly competitive marketplace. To derive positive outcomes, app developers must focus on developing lighter apps with minimal loading times, so users enjoy relatively seamless experiences. But even while keeping the apps lean, they need to ensure great content for an engaging consumer experience.
Developers should also customize apps for different cohorts of users. This is particularly important because companies are seeing an increasing number of orders originating in tier-II and tier-III cities, emphasizing the importance of multilingual and regional language content. The comfort of conversing or transacting in their language facilitates higher conversion in non-metros.
M-commerce allows consumers to order anything at any time from anywhere. Ordering products or services from home saves time, money and effort, especially during the pandemic when consumers are avoiding overcrowded malls and markets.
As a result of evolving consumer habits, using apps to generate greater leads and conversions is not a choice for retailers any more. Rather, it is imperative if retailers do not wish to be left behind in the ongoing battle for gaining, retaining and growing their market share, even as a significant percentage of retail businesses shift from offline to online.
With the e-commerce user base growing Y-O-Y, even SMEs are realising the importance of apps to expand their customer base. After all, there is no better way of reaching out to consumer cohorts 24×7 from anywhere, anytime.
(Sanjeev Barnwal is the founder and CTO of Meesho)
India on Wednesday asked members of the World Trade Organisation (WTO) to review the continuation of the moratorium on customs duties on e-commerce trade, seeking a change in status quo prevailing over the past 24 years.
Speaking at the thematic session on e-commerce work programme and moratorium at the 12th ministerial conference of the WTO, commerce and industry minister Piyush Goyal stressed that the financial consequences of such a moratorium have been mostly borne by the developing countries.
According to an estimate, 86 out of 95 developing countries are net importers of digital products and only five big tech giant companies are controlling the market.
Between 2017 and 2020, developing countries have lost potential tariff revenue of at least $50 billion only on the import of 49 digital products, Goyal said. About 95% of this revenue tariff loss is borne by the developing countries. By 2025, this potential revenue loss is estimated to be about $30 billion a year.
WTO members have agreed not to slap customs duties on electronics transmission since 1998 and the moratorium has been extended periodically at successive ministerial conferences. The validity of the current extension is up to the 12th ministerial. Many members, mainly the developed countries, are seeking another extension up to the 13th ministerial (whenever it’s held).
While small exporters of physical products like textiles, handloom, clothing, footwear, mainly based out of developing countries, are facing both domestic taxes and customs duties, the big digital exporters are being exempted from custom duties due to the moratorium, Goyal said.
An estimate points out that about 40% of cross-border physical trade globally will be replaced by 3D printing by 2040. “This will actually jeopardise domestic manufacturing capacities which will be subjected to regular tariffs, which would actually become totally uncompetitive. I think this moratorium which has been continuing for 24 years needs to be reviewed, relooked at,” Goyal said.
“Is it fair that the cost of the moratorium is almost completely borne by the developing countries for extending duty free quota, quota free market access, largely for a very few players? Can we justify this wealth accumulated by Big Tech at the cost of the ability of the emerging markets to generate resources, to meet the basic needs of their large population?” the minister asked.
Since most countries didn’t have concrete policies on e-commerce, which was an emerging area of trade in even developed countries in 1998, they had decided to establish a work programme on it to hold intensive talks and also impose a moratorium on customs duties on electronics transmission.
Interestingly, even over two decades later, WTO members have neither defined what constitutes electronics transmission nor come to an understanding on its coverage of products, let alone finding ways to impose the duties. This has made it difficult for countries to even tax imports of products that can somehow be linked to digital goods.
With rising growth in online trade, Consumer Affairs Secretary Rohit Kumar Singh on Tuesday stressed that there should not be a situation of monopoly by large e-commerce players like Amazon and Flipkart, and there is a need to prepare a new framework to protect consumers as well as small retailers.
Addressing an event to celebrate the World Consumer Rights Day, he said the government has recently introduced UPI (Unified Payment Interface) in feature phones and said this will lead to an exponential increase in digital payment and e-commerce.
He said there will be a need to prepare a new framework to protect consumers from unfair trade practices.
Stating that the size of e-commerce players like Amazon and Flipkart will keep growing, Singh stressed on the need to protect consumers from possible monopolistic situation.
On the sidelines of the event, the secretary said the symmetry between consumers and suppliers is going in favour of intermediaries (market places).
“When more and more people will trade on marketplace, the power equation of consumers will be loaded in favour of intermediaries. So, we will have save them from that. What choices do I get, are increasingly being dependent on the marketplace. So we want that to be fair,” he added.
Singh emphasised on the algorithm independence and noted that the European Union has very strict rules on this as market places have to declare the basis on which search results will be displayed for any commodity. He also spoke about the importance of privacy of data of a consumer.
“We should not be having a situation which is leading to monopoly,” the secretary said and added consumers and small retailers need to be protected.
Singh highlighted that the department of consumer affairs and department of Promotion, industry and internal trade (DPIIT) are developing ONDC (Open Network of Digital Commerce), which is an interconnected system for all e-commerce platforms.
“The vision is to provide and facilitate neutrality,” he said, adding that the basis of search results should be clear to consumers.
Stating that digital e-commerce would stay, the secretary said there is a need to ensure that the big players give fair treatment to consumers in terms of privacy and choices.
The government is in the final stages of drafting new ecommerce rules, tweaking an earlier draft that had sought to tighten the regulations for foreign-owned marketplaces, including barring their affiliated entities from selling on the platforms and restricting flash sales.
The new version will be released soon, said a senior official of the Ministry of Consumer Affairs, Food and Public Distribution who did not wish to be named.
Top industry bodies representing the Tatas, Amazon, Walmart-owned Flipkart and others have opposed some of the proposed clauses in the earlier draft. Some of the key provisions have also not found favour with the finance and corporate affairs ministries, and the government’s public policy think tank, Niti Aayog.
Given the differences, the Department of Consumer Affairs has held discussions with several companies and industry associations on the proposed amendments, said the official.
Controlling commodity prices
The Ministry of Consumer Affairs, which also looks after food and public distribution, has been using data and predictive analytics to keep the prices of pulses under control for the past three months, the official said. The department has developed a price forecasting model to predict the prices of major pulses six months ahead of a possible spike.
The autoregressive integrated moving average with explanatory variable (ARIMAX) model uses estimates of domestic availability of commodities at mandis and imports, thereby predicting supplies months earlier.
Jaipur-based Divya Gems and Jewellers’ owner, Leela Ram Bunkar, had a humble beginning as a craftsman before he capitalized on an opportunity to move his business to an e-commerce marketplace that gave him access to a global audience for showcasing his products. Today, he proudly services international clientele across continents.
Like Bunkar, millions of business owners have experienced a life-changing impact from selling online. The last eighteen months have redefined its importance and accelerated the pace of its adoption. Today, e-commerce is no longer a good-to-do; it has become a business imperative for ensuring continuity and growth.
COVID-19 has unlocked doors for global trade in innovative ways. According to Payoneer, global e-commerce revenue grew by over 80% in Q2 and Q3 of 2020, boosting online shopping across the world. The report also states that India is amongst the top 10 countries in cross-border e-commerce growth. Global cross-border commerce is fast emerging as the next big growth opportunity for the Indian e-commerce industry. As per Forrester Research, cross-border commerce is expected to grow at a CAGR of CAGR of 17.3% by 2022. It may see its market share in the global e-commerce market grow to 22% in 2020 from the earlier 15% in 2015.
E-democracy in e-commerce Over the years, the general perception has been that e-commerce is an expected choice of marketing for only well-established retail brands. There has been a drastic change in the business strategy of local businesses who have been successfully navigating their operations to online platforms.
Direct-to-Consumer (D2C) brands and independent sales channels have been trending alongside e-commerce. Retail companies are doing away with distributors and middlemen and connecting directly with consumers through e-commerce platforms. This allows them to not only reduce costs and overheads but also get a closer understanding of their consumers’ buying patterns, deal with product enquiries and directly provide customer service. By offering enhanced customer experience, brands get deeper insights into their shopping behaviour. This allows D2C brands to customise their products for different markets catering to local cultural differences, and thus succeed in diversifying into different countries.
Key Factors Driving Cross-Border E-Commerce – Unlocking global trade for Indian sellers With expanding digital access, consumers are today able to connect with sellers and retailers from international markets to tap into a wider choice of products with competitive pricing and quality.
The first key factor driving cross-border e-commerce is consumer preferences for the most relevant product no matter where the source. This fulfils the premise of an open marketplace as we saw in Bunkar’s case that cross- border e-commerce gives sellers’ access to millions of diverse buyers.
The second factor is the ability for sellers to manage fulfilment and complete transactions through a range of integrated logistics as well as payment on trusted open marketplaces that enable a frictionless experience. This gives immense confidence to small sellers and large retailers as well as buyers to participate in the cross-border ecommerce market thereby contributing to a vibrant two-sided marketplace.
These marketplaces provide equal opportunity to all types of sellers not just by providing integrated services but also deep insights on what to sell.
Lastly and most importantly, the evolving ecommerce ecosystem in India which includes the marketplace, logistics providers and government agencies need to work in close coordination to make Indian sellers’ competitiveness matches those of other cross border sellers from around the world.
Three key elements to make Indian seller competitive in global marketplace would be: Simplification & digitalization of export procedures to reduce delivery timelines Offering low-cost logistics solutions through India Post to be price competitive Favourable policies for India centric categories such as jewellery and ethnic wear.
As exports from India reached a high of $35.4 billion in July ’21, the momentum augurs well to capture the massive headroom for growth that exists. With strong long term growth projections cross-border e-commerce, it is time that Indian businesses focus their attention on going global.
At present, exports contribute to about 20% of India’s GDP. However, considering the size of our economy, our manufacturing prowess, the growing share of MSME (Micro Small and Medium Enterprises) contribution to the economy, increased internet penetration and rapid pace of technology adoption – exports can play a critical role in economic revival post COVID-19. What is critical is to use technology and lower the entry barrier for millions of MSMEs across India to participate in export opportunities.
MSMEs contribute to over a third of the GDP of India while accounting for half of the country’s exports. They generate employment opportunities and currently employ almost 110 million people across the country, which is why they are aptly regarded as the backbone of the Indian economy. A laser sharp focus on empowering Indian MSMEs to leverage e-commerce and drive Indian exports can help us address the Prime Minister’s vision of ‘Atmanirbhar Bharat’ and support the rise of global D2C brands from India. MSMEs can benefit greatly from the opportunities that global trade offers. However, entry barriers like market access, navigating the complexities of cross border logistics and payments, large initial investments and an uncertainty of demand deters these businesses from realising their full potential.
This is where e-commerce exports can benefit Indian MSMEs. E-commerce exports enable businesses to sell directly to customers across the world. It helps businesses transcend boundaries and get access to a much larger pool of customers. It also provides an ‘easy to adopt and scale’ mechanism for MSMEs to grow their business outside India, without having any footprint locally in international markets and reducing dependence on intermediaries – bringing the ‘seller’ closer to the ‘customer’. As recently as 8 years ago, if an Indian MSME wanted to set up an exports business, they had to visit global trade fairs, book orders, figure out logistics and shipping and then wait for the payments to come in. Now all of this is achieved seamlessly, thanks to e-commerce. E-commerce creates a level playing field for any kind of business to access global markets. It dispels the notion that exports are meant for larger businesses that can make massive investments to take their operations overseas.
The rising popularity of ‘Made in India’ products has also given rise to innovative customer use cases for products. This includes customers replacing creamers in coffee with ghee or using printed bedsheets as beach throws. Indian products across categories are witnessing great demand in global markets, from traditional categories like textiles, herbal products, teas to newer sectors like toys, home and kitchen products and a lot more. Thousands of Indian MSMEs are already benefiting from this demand, helping them create a niche for themselves. Importantly, these businesses have a positive impact downstream on job creation and the economy overall.
The role that technology has played in transforming how business is done in the past 18 months has led to our optimism about the opportunity that e-commerce exports offer Indian businesses. With e-commerce exports, Indian businesses have an avenue to create an international identity for world-class products manufactured locally.
We believe that e-commerce can play a big role in making exports easy and accessible for lakhs of MSMEs across India and take the local innovation and expertise global.
Amazon India on Tuesday said it has inked an agreement with the Industries and Mines Department of Gujarat government to help drive e-commerce exports from the state.
As part of the MoU (Memorandum of Understanding), Amazon will train and onboard MSMEs from the state on Amazon Global Selling, enabling them to sell their unique Made in India products to millions of Amazon customers across over 200 countries and territories, a statement said.
Amazon Global Selling helps companies launch their brands globally using the e-commerce major’s platform.
Amazon will conduct training, webinars and onboarding workshops for exporters from key MSME (micro, small and medium enterprises) clusters like Ahmedabad, Vadodara, Surat, Bharuch and Rajkot and others, the statement said.
The workshops will focus on sharing expertise and providing training to MSMEs about B2C e-commerce exports and selling to over 300 million people worldwide through Amazon’s 17 foreign marketplaces, it added.
These courses are designed to provide MSMEs with the knowledge and tools they need to launch their brands and expand their businesses internationally using the Amazon Global Selling programme.
“Gujarat has vibrant gems and jewellery, apparel and textiles and handicraft sector which is held together by lakhs of MSMEs. One of our key priorities has been to boost exports from Gujarat and through this partnership with Amazon, we aim to empower lakhs of MSMEs in Gujarat to embrace e-commerce exports,” Gujarat Chief Minister Vijay Rupani was quoted as saying.
It will help them leverage Amazon’s global presence to showcase their products to customers across the world, he added.
“MSMEs taking their local products to global customers will play a critical role in supporting the local economy and display the strength of the state’s manufacturing and innovation prowess. Our government remains committed to make Gujarat an attractive business and investment destination,” Rupani said.
Abhijit Kamra, Director (Global Trade) at Amazon India, said the partnership with the Gujarat government is a step towards elevating lakhs of MSMEs from across the state to a global level.
The Amazon Global Selling programme has already enabled more than 70,000 Indian exporters to cross USD 3 billion in cumulative exports, showcasing millions of Made in India products to customers across the world, he added.
“The programme is witnessing tremendous momentum with increasing interest from exporters across India. We remain committed to making exports easy for Indian businesses and empower them to tap into their true potential, thus contributing to the vision of an Aatmanirbhar Bharat,” he said.
E-commerce firms such as Amazon and Flipkart are strengthening their supply chain networks with the addition of new facilities ahead of the upcoming festive season. They are also scaling up their hiring initiatives to meet consumer demand.
The coronavirus pandemic has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency.
“For us festive season is one of the largest (events) in the country,” said Akhil Saxena, vice president, Customer Fulfilment, APAC, MENA and LATAM, Amazon, in an interview. “It is for the whole country whether it is retail or online commerce, where customers want to buy new selections, get deals and have a great shopping experience.”
These sellers would be bringing in new appliances and models of mobile phones, personal care items and personal computing products. “And for keeping that inventory we want to create the infrastructure,” said Saxena. “Ahead of the festive season, we will increase the storage capacity of the fulfilment network by 40 per cent.”
Amazon India plans to expand its fulfilment network in India, with a nearly 40 per cent increase in its storage capacity over the last year. With this expansion, Amazon.in will have more than 43 million cubic feet of storage capacity, across 15 States, supporting around 850,000 sellers across India.
“Ahead of this festive season, we’ve expanded the storage space in multiple states like Maharashtra, UP, Telangana, Tamil Nadu and Karnataka,” said Saxena.
The expansion is in line with Amazon India’s continued efforts to heavily invest in the country and create tens of thousands of direct and indirect work opportunities. Amazon India’s overall fulfillment network will be spread across a floor area of more than 10 million square feet. This is more than the land size of 125 football fields, housing millions of products from notebooks to dishwashers.
Also, over 11,000 offline retailers and neighbourhood stores from Maharashtra are now part of ‘Local Shops on Amazon’.With the upcoming festive season, Amazon is focused on helping Local Shops sellers grow their business and recover from the recent economic disruption caused by the pandemic.
Amazon has committed that it will create around 20 lakh direct and indirect jobs by 2025. It has already created around 10 lakh direct and indirect jobs. Deepti Varma, HR Leader, Corporate, APAC, and MENA, Amazon, said that even during the pandemic, the firm nearly created around 3 lakh direct and indirect jobs across technologies, content creation, retail, logistics, and manufacturing. Amazon said it is currently hiring for more than 8000 direct job openings across 35 cities in the country.
Last year, e-commerce firms witnessed blockbuster festive season sales. India’s online festive sale for a month — during October-November — raked in $8.3 billion in gross sales, including for brands and sellers, up by 65 per cent year-on-year, exceeding forecasts, according to a report by consulting firm RedSeer. E-commerce industry executives said that they are expecting to witness more growth than that this year.
Another major e-commerce firm Flipkart is also strengthening its supply chain network across the country with the addition of new facilities ahead of the upcoming festive season. These new fulfilment centres will help create deeper capabilities to support thousands of sellers, MSMEs (micro, small and medium enterprises), small farmers to cater to the growing customer demand. They would also create more employment opportunities while enabling faster deliveries for consumers.
“The expansion you do in a year becomes the benchmark for next year. There is a big jump in that this year and this is being filled from a supply chain perspective,” said an industry executive having knowledge about the demand witnessed by Flipkart. “The demand is coming back which would boost the economic activity and warehousing space and jobs on the grounds.”
Flipkart recently strengthened its supply chain network in Karnataka with the addition of three new facilities ahead of the upcoming festive season. These new facilities will serve sellers of large appliances, furniture, mobiles, apparel and electronics and are located in Kolar, Hubli and Anekal. The facilities are helping more than 10,500 sellers. The expansion will further contribute to the state economy and create additional 14,000 direct and indirect job opportunities, as the sellers get national market access for their products.
Recently, Flipkart also strengthened its tech-enabled supply chain network in Maharashtra with the addition of four new fulfilment and sortation centres to support local sellers from the state and cater to the growing demand for e-commerce. The new facilities located in Bhiwandi and Nagpur are helping create over 4,000 direct and indirect jobs. Apart from growing customer demand, this expansion comes on the back of a growing seller count from the state which rose by 30 per cent in the last year.
E-Retail has particularly been a boon during the Coronavirus (Covid-19) pandemic after the setbacks caused by widespread disruption (for consumers and small businesses) and loss of jobs. In the future, the e-retail market is expected to grow to $120–140 billion by FY26, increasing at approximately 25 per cent–30 per cent per annum over the next 5 years, according to the report ‘How India Shops Online 2021’ by Bain & Company in association with Flipkart.
The growth will be led by smaller towns that account for four out of five new shoppers. In addition to small towns, women and older shoppers have gained prominence in the online shopper base over the last year, and this trend is expected to continue.
Experts said as e-commerce companies are expanding their operations to penetrate deeper into the smaller towns, their supply chain and logistics considerably ramped up paving way for more seasonal hiring (about 25-30 per cent as per reports) across tier-2 and tier-3 cities.