eCommerce Has Provided Widest Possible Choices To Consumers At Most Competitive Prices: FM Arun Jaitley
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From the day India must have been introduced to the concept of eCommerce, the growth of this industry has been like no other country. Despite the fact that India does not have the best internet service and is lower than many poorer countries, the country’s eCommerce sector tripled – or grew by 209 per cent over the last five years. This rate of augmentation is not only difficult to match but unlikely to even overtake.
"E-commerce has provided widest possible choices of goods to the consumers at most competitive prices at click of a button," said Finance Minister Arun Jaitley speaking at the annual lecture of Competition Commission of India (CCI).
According to a new survey, this growth is so dynamic that online shopping has outrun the other (read obsolete) mode of shopping where the consumer visits the shop personally. Now, about 80 per cent of buyers prefer to shop over the Internet.
A lot of reasons go into this humongous expansion of this industry, which in the beginning was very sceptic of it. Increase in internet and mobile penetration remains to be a large reason along with growing acceptability of online payments and favourable demographics. But another reason lies behind this growth and it is the intense competition between the eCommerce firms.
The online retailing industry of India has taken a Darwinian turn with giants of this industry battling for the survival of the fittest. The statement has become very apt for this business as it is in India where International firms are finding it hard to maintain their position due to local competition. A classic example of this is Amazon, world’s largest eCommerce company, which was unable to maintain its first position in India, and facing intense competition from home company Flipkart, now stands at the second position. Even Amazon grew with time and pushed Snapdeal to the third position.
Amidst all this competition and nail-biting tension among these firms, it is the consumers who have been highly benefitting from this with great discounts and schemes. Amazon’s Great Indian Festive Sale and Flipkart’s Big Billion sale represents this competition aptly.
Talking about this competition, Arun Jaitley said that innovative technology is being used by eCommerce companies is benefiting the customers while promoting competition. "Competition will provide quality of services and products to the consumers at competitive prices. It promotes innovation, efficiency and quality,” he added.
According to the survey reported by PTI, 31 per cent shoppers opt for online shopping in order to save the time and effort that might be spent on physically going to stores to buy the same products. About 28 per cent customers are driven to buy online due to the availability of discounts and promotions.
Pitching for competition, Finance Minister on Saturday cautioned that pro-business environment without "pro-competition" policies can result in dangerous consequences, including crony capitalism.
"Being pro-business alone is not enough. Being pro-competition is essential to be with pro-business. If you are pro-business without being pro-competition, the consequences could be very dangerous," he said.
Jaitley further mentioned that it is the absence of this competition in railways and state transport undertakings that have kept consumer deprived of world class facilities.
"Whereas, in the civil aviation sector which was open to competition, the customer gets best of the facilities along with competitive fares.”
The minister said India should move faster on its current path of an open economy where customers are benefited with more choices. Believing that government there should be lesser government monopolies in the interest of promoting competition he said, "Socialism creates government monopolies where governments decide what to produce and how much to produce leading to a shortage economy. Whereas, competition gives wider choices.”
Jaitley also said that India was improving the ease of doing business index and recent initiatives like Insolvency and Bankruptcy Code will facilitate ranking improvements for the country.
"The sick industrial companies act was hardly ever able to resolve the problem. No investor would invest in a sluggish economy where there are entry barriers and no option to exit. With the bankruptcy code, we are sure things would change. With the new regime, there will be significant improvement in this area," Jaitley said.
With the passage of Bankruptcy and Insolvency Code, easy exit will be facilitated.