Pahle India Foundation, a leading public policy think-tank, hosted a webinar to discuss the impact of e-commerce on ancillary services sectors. The panel comprised eminent dignitaries including government officials, industry leaders, and sector experts, and was moderated by Ms. Nirupama Soundararajan, CEO, Pahle India Foundation.
While the direct benefits of e-commerce for consumers in revolutionizing the shopping experience has been fairly quantified, its impact on logistics and services has not been documented in as much detail. The growth of the sector has had a massive impact on several associated industries. The logistics sector was one of the earliest beneficiaries. On the back of the growing online retail sector, India’s e-commerce logistics industry alone is expected to reach INR 492.4 billion by 2025. This can be attributed to a rising demand in India’s tier-2 markets and an increasing focus on e-commerce and exports. This opportunity has led to established player like Amazon to set up Fulfillment Centers across 15 states and provides 43 MM cubic ft of storage space for seller inventory and Sortation Centers across 19 states with a processing area of close to 2.3 million square feet across the country.
Ms. Soundararajan stated, “We know that e-commerce has had a positive impact on MSMEs, exports, entrepreneurship and other ancillary sectors. It is now important for us to understand not just the extent of the economic impact but also understand its contribution to the circular economy.” Dr. Badri Narayanan Gopalakrishnan, Fellow and Former Trade and Commerce Head, NITI Aayog, said, “Rather than a silos approach, a multidimensional approach should be taken to ensure that policies don’t restrict the growing potential of our economy.” He further added, “E-commerce is facilitating greater efficiency which also means reduced emissions. Despite concerns about the digital carbon footprint, it is clear that e-commerce has a net negative impact on emissions and, therefore, a positive effect on the environment.”
Ms. Sabina Dewan, President and Executive Director, Just Jobs Network, also echoed that e-commerce has helped develop the architecture of India’s global economy by creating income opportunities for a large spectrum of the workforce. However, she added, “The uber-ization of ancillary sectors, i.e., the rise of gig work, means we do not have the employment data to really know what the impact of e-commerce on job creation is.“ Mr. Vasudevan Rajagopalan, Regulatory Affairs Manager, India, DHL Express, said that e-commerce has made the express operators more nimble. He added, “With India going stronger with the money transactions of UPI, etc. the introduction of ONDC may assist in reducing commissions, which will also help SMEs.”
Through e-commerce, small entrepreneurs and businesses are able to access markets and geographies beyond their physical presence. MSMEs also found a simple and cost effective way to market and distribute their products as e-commerce platforms helped with logistics. This was an important development because coupled with the logistical and market reach advantages, MSMEs are now able to access foreign markets at a much cheaper cost as compared to traditional export value chains, enabled by e-commerce.
Vinod Kumar, President, India SME Forum, highlighted, “India has over 1 crore registered SMEs but only 33,000 exporters, clearly indicating that most of them don’t have the requisite support and knowledge to adapt to the changing trends of our economy. E-commerce has been a classroom for MSMEs in India in this regard and will be the biggest enabler in the years to come. We are launching a program for women entrepreneurs to export through e-commerce by onboarding to marketplaces like Amazon.”
