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  1. Lagging Potential

Lagging Potential

India still to work towards a conducive environment for e-tail even as comparator economies surge ahead

By: | Published: March 30, 2015 12:14 AM

The Unctad ranks India a lowly 83rd for B2C e-commerce readiness among 130 countries surveyed. As per its new report, Information Economy 2015, the top ranked countries are all developed economies while only two comparator economies among the developing ones, Malaysia and Brazil, make it to top-10 developing economies, ranked 45 and 47, respectively. The index is based on performance on four heads—internet use, secure servers, credit card penetration and postal delivery services. The report suggests that the best e-commerce environments exist in small and rich nations that remain some distance from major markets.

The report holds that the e-commerce growth spurt of the recent years—global B2C e-commerce had totalled $1.2 trillion in 2013—is largely attributable to developing economies. So, why has India lagged? While Indian mailing and courier services form an enviable network, it is our low internet penetration—on account of poor broadband infrastructure as well as low digital literacy—that is failing us. Also, though e-commerce players have successfully implemented alternative payment options in India—cash-on-delivery, for example—that the index considers credit card penetration doesn’t help, given the poor penetration of plastic money. Neighbouring China, though ranked 63rd (perhaps, also for the same reasons as India), is already the largest B2C e-commerce market by revenue and number of online buyers. Given India has a comparable potential for online buyer strength, it is high time that the government focused on putting up the necessary infrastructure for e-commerce to boom. At the same time, a stable, e-tail-friendly policy needs to be in place—the taxation shockers in the states, for instance, need to be dealt with—for India to catch up with and then surpass its peers.

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