Here’s what industry insiders have to say on Piyush Goyal’s remarks on e-commerce growth

The recent comments of Union Minister of Commerce and Industries Piyush Goyal ahead of the mega e-commerce sales seasons, have caused quite a stir.  

According to him, by offering products at a nominal rate, e-commerce, is to a great extent eating up on the high value and high margin products of the small retailers which may be the only products helping them earn profits. Delivering a speech recently, Goyal said when Amazon says it is going to invest a billion dollars in India, the underlying story that this is not coming to support the Indian economy is forgotten. It was to fill the “billion-dollar loss” in its balance sheet that year, he added. “If you make Rs 6,000 crore loss in one year, doesn’t that smell like predatory pricing to any of you?” he added.

Amazon declined Business Today’s request for a comment.

It is pertinent to note that the e-commerce giant celebrated 10th anniversary in India last year. Back then, the company claimed to have digitised over 4 million small businesses in India, enabled over $5 billion in cumulative ecommerce exports and created over 1.1 million direct and indirect jobs in the country.

Commenting on Goyal’s statement, entrepreneur and investor K. Ganesh said, “The government plays a crucial role in ensuring a level playing field, preventing predatory pricing, and establishing fair market practices to avoid the dominance of a few major players and restrict monopolistic behaviour by large corporations.”

According to Ganesh, a regulatory role is essential to set and enforce these boundaries. On the other hand, the creation of direct and indirect jobs by e-commerce, discounts leading to widespread adoption, and convenience to consumers, as well as the accessibility of products and services due to extensive reach and low pricing, offer significant benefits to Indian citizens.

But drawing the example of Reliance Jio’s impact on the fate of the other telecom operators, Ganesh stated that such concerns prevail not only in e-commerce but across all other industries.

However, Emmanuel David, former HR leader and Mentor for the Executive Master of Science programme at Columbia University Center for Technology Management, said that it is important to think about the significance of e-commerce in a country like India.

“Such mode of business may be effective in a country with dispersed population but given the population density and unemployment rate in India, how important is e-commerce?” David added.

But interestingly, last year, a report by TeamLease anticipated generation of 700,000 gig jobs in the second half of 2023 to meet the market during the festival period which was a 25% rise from that of 2022.

On this, Ganesh said that the creation of direct and indirect jobs by e-commerce, discounts leading to widespread adoption, and convenience to consumers, as well as the accessibility of products and services due to extensive reach and low pricing, offer significant benefits to Indian citizens. “These advantages compensate for the lack of access and the poor physical infrastructure that affects our ecosystem,” he added.  

However, according to David, with a huge population of skilled youth in the country, depending on such seasonal blue collar jobs is a matter of grave concern. “Though many such gig employees get hired permanently, how many of them get that opportunity? How do you ensure their long-term employment once the festive season is over? It is something to think about,” David concluded.