by Suneet Manchanda
The evolution of the e-commerce landscape is marked by the shifting of the reins to the consumer, who has unquestionably emerged as the king over time. Over the years, VC funded e-commerce players have invested billions in acquiring consumers by offering huge cash discounts and cashback offers, free shipping, and no-cost EMIs among other things. Many have even tied up with brands for exclusive launches to build a strong connect with their target audiences. With the change in working habits, buying capacity, and overall lifestyle, a consumers preference has changed to convenience and trust. This is making a behavioural shift towards buying online, where a large number of consumers are opting to order medicines, food, and even utility-based services like plumbers, beauticians and carpenters online.
It is unquestionable that the ecosystem has evolved. We have seen several noticeable improvements that have led to significant growth in e-commerce business in India. As per one report, India is likely to be around USD35bn in market size, at the end of the year 2018. This is accompanied by an increasingly higher number of shopper inflows from tier- 2 & 3 cities. There has also been a remarkable rise in investments from traditional brick and mortar retailers offering omni-channel experience to their customers.
Are we clipping the wings of a bird that has just started to soar? In my view when any domain starts to involve a lot of stakeholders, it becomes imperative to set a governing or a regulatory body to ensure that interests of all the stake holders remain uncompromised. For the initial stages of this e-commerce boom, we had a handful of e-commerce players across categories that were specialised e-commerce verticals focusing on one product category. However, looking back most of them do not exist today as a few were acquired by larger players and the remaining had to shut shop leading to suppliers or sellers not getting their stocks and payments.
Not all rainbows and sunshine
While the industry has grown by 3 times in the last 4 years and attracted billions of dollars in funding, there are no clear contours of this business. The lack of a perimeter allows for a lot of ambiguity with respect to interpretation of business practices, allowing stakeholders to escape from wrong doings in the existing regulatory framework to their benefit.
Of late, many issues have surfaced against e-commerce enterprises dealing with counterfeit products, incomplete deliveries and warranties not being honoured. This is worsened by more serious delinquency in nature like alleged cases of dodging the erstwhile VAT, flouting the multi-brand retail FDI regulations and data privacy laws. The other half of the story remains dodgy as well with consumers taking ecommerce sellers for a ride by returning products after usage and returning it under liberal returns policy of ecommerce portals.
Recently, there was a report in media where the High Court ordered one of the largest e-commerce players to go for an out-of-court settlement with a large footwear brand for selling fake items and ordering them to de-list specific sellers hawking Fake Beverly Hill Polo Club merchandise. There was another report in the media about a large number of restaurants operating in the food delivery sector without an FSSAI license.
Policy must take varied stakeholders into account
While it is evident that we are at a turning point, policy experts should align with all the industry experts like e-commerce businesses, classifieds, app-based cab aggregators, payment service providers, logistics service providers, and retailers associations, to dissect all aspects of the multifaceted e-commerce gamut. As effervescent as the realm is, it requires the right sort of regulatory substratum to enable rapid growth that all are working towards.
It is absolutely a must to ensure that interests of all the key stakeholders are taken into consideration, one of the primary ones being the consumer. The government has been making headway with these changes and has already made significant breakthroughs in setting up such regulatory bodies. Having a government led authoritative entity in place will also ensure that there is ease in doing business, greater transparency and streamlined routes of functioning from the start.
The time is ripe to synthesis all elements of this ecosystem that will eventually benefit everyone and propel the dream of Credible India, a nation on the road to becoming a $5 Tn economy.
Suneet Manchanda is the CEO of Karvy E-commerce Services.