Encouraging e-commerce companies in India to include rural suppliers and merchants to the digital growth of India, NITI Aayog CEO Amitabh Kant told Indian e-commerce companies to be representative of Make-in-India products over Make-in-China on their platforms.
Speaking at FICCI’s annual retail, FMCG and e-commerce convention, Massmerize 2016, Kant said, “Currently, e-commerce contributes mere 1 per cent of the overall economy but in five years from now it will grow and contribute around 10 per cent.”
“For Internet to contribute that much, in addition to pushing Internet and smartphones in the hinterland, e-commerce players in India must deepen the market with thousands of products from Indian small and medium enterprises (SMEs). That’s how China has been able to reap benefits of e-commerce,” he added.
Kant heads a high level committee that will review e-commerce rules – including the FDI norms – for the sector. India recently allowed 100 per cent FDI in e-commerce marketplace, keeping inventory-led models out of its purview.
Kant believes that in order to bring democratization between e-commerce and brick- and- mortar retailers its important that e-commerce works like a marketplace model.
“Because democratization happens when the prices remain unchanged and transparent. If marketplaces have a vested interest in suppliers than that doesn’t work fair for both consumers and suppliers,” he said.
“At end of the day it boils down to consumers. E-commerce worked well in China because prices and the suppliers names are clearly mentioned at the marketplaces. Consumers have to just decide what and which supplier they would like to get the products from.” he added.
He also lauded Alibaba’s growth in China.
For brick-and-mortar retailers in India, Kant said e-commerce should become an important sales channel and strategy. “In the coming years, every phone will be a smartphone and Internet’s reach will be rapid. If brick-and-mortar retailers want to grow and expand continually, they must look at e-commerce as an important channel.”