‘Govt intervention can promote ecommerce among small sellers’

The right intervention on behalf of the Indian government will be instrumental in promoting e-commerce among small and medium enterprises in the country, said Dr Avik Sarkar, Professor, Indian School of Business (ISB) and former Head of Data Analytics Cell, Niti Aayog, in an interaction on Tuesday. Sarkar said this in the context of the findings of a report on e-commerce released by the ISB in the first week of September. 

In a Twitter Space discussion hosted by The Plunge Daily, Sarkar said there are many benefits for sellers if they decide to go online. “If you expand into these digital streams, you can expand your business beyond your physical means. You will start seeing the multiplication effect in your city or neighbourhood and even beyond your own places,” said Sarkar. “The e-commerce platforms like Amazon, Flipkart, Snapdeal have already been onboarding sellers, but that is happening in very small numbers. I think government intervention will be very helpful to promote e-commerce.” 

The session, anchored by Ashutosh Bhattacharya, was attended by Vinod Kumar, President of the Indian SME Forum (ISF). Kumar told the listeners that India was way past the stage when cash was the dominant method of shopping. “The current time is no longer when anybody can have a business on cash and grow big at the same time. It’s not possible anymore. We are past those times when we used to look at large businesses running primarily on cash,” said Kumar. “The sellers need to understand that if they have to grow their business beyond the borders and present limits, they need to go online,” Kumar added.

The session was also attended by Mr Sanjay Kataria, a third-generation entrepreneur and co-owner of Sindhi Dry Fruits, a New Delhi-based enterprise. Kataria said that e-commerce helped them greatly to extend their presence to new regions and customers. “I have achieved about 25 per cent growth in sales. This increase has been possible only via operating online. If you have your own established brand and good presence in your local area, e-commerce helps you grow,” said Kataria, who credited digitization with helping them tap into the markets which were earlier not possible for them. “Earlier, people would not trust us because any customer in Tamil Nadu or Kerala would prefer trusting a platform like Amazon when it comes to entering their credit card details online,” he added.

Throwing light on the e-commerce report released by the Indian School of Business (ISB), where he is a faculty member, Sarkar said even though the Indian government had come up with a draft e-commerce policy in 2017-2018, it was finalized only recently as they needed to factor in multiple perspectives when coming up with policy recommendations. “For this report, we held consultations with sellers, platform owners, small platforms, large platform owners, academia and think tanks. This was a very consultative approach, in which we organized about four roundtables attended by 30 to 35 people from different fields,” Sarkar informed.

A data scientist who has worked with several multinational companies, Sarkar said they took into account four major factors when coming up with the ISB’s e-commerce report – FDI, business aspects, taxation, data and research. “The moment you come and sell things on e-commerce platforms, you are doing things in white because your transactions are being tracked on some platform. You are liable to pay more taxes even if you are doing a small amount of business,” said Sarkar. “Then there are aspects about the business models. How can it go to the interiors? How can it be sold in foreign countries? And if there are opportunities, what are the barriers for many other small sellers to sell abroad? In the aspect of data and research, we looked at your product launch and search rankings,” he added. 

Kumar, learning from his tenure as the President of ISF, said he still felt that small offline retailers are not taking full advantage of the digital economy that is driving massive growth in the ecosystem. “These sellers need to figure out a model that answers many questions. How can we be competitive? How can we reach out? How can we offer our best customer service? How can we create a sizeable sustainable business across platforms?” said Kumar. “Just because the seller is online, he can see exactly what he is doing, their growth path and where he will be later,” he added.