Indian e-commerce sector has become an integral part of the economy presently. According to IBEF (Indian Brand Equity Foundation), “The Indian e-commerce market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of 2017. The ongoing digital transformation in the country is expected to increase India’s total internet user base to 829 million by 2021 from 604.21 million as of December 2018.”
Easy accessibility to the internet and the advent of low-budget smartphones have driven growth in the e-commerce sector, according to the cited database company. E-tailers made use of this phase and manipulated their e-commerce platforms to make more profits. By thrusting brands, in which e-tailers own stakes, and rendering high discounts to the consumers, e-tailer companies started creating an unstable online marketplace. As a result, small traders started running out of the business and faced problems in selling their products.
To curb one-sided competition in the e-commerce industry, in the last year, the Indian government had stopped online retailers like Amazon and Flipkart from selling products of the firms, where they are stakeholders, and further, entering into exclusive deals for merchandise, as reported by the daily news, Mint.
Counteracting Foreign Investors-backed E-commerce Companies
To create a level playing field, the government is deciding to open its online e-commerce platform, GeM (Government e-Marketplace) for individual buyers and private companies. With this change, GeM will start working like other e-commerce platforms and compete with them, according to the daily news, The Economic Times.
“We will set a benchmark for online marketplaces. We plan to make it an ideal platform,” a government official told the daily news.
The transition of the GeM from the B2B model to the B2C model will be taking place in three courses. In the first part, the Government e-Marketplace will enable private companies and contractors who work on government run-projects, to purchase products from the website directly. With this, the government's role will be eliminated as it used to procure goods and then hand it over to the contractors.
In the second part, private entities can utilise the government’s e-commerce platform to procure products for their personal use. In the third part, the platform will enable individual buyers to procure products from the website.
The government officials told the cited media that the plan is to make GeM host a very wide range of products, including those typically featured in consumer e-commerce purchases, for example, white goods.
GeM About to Change the Game
To make e-market conditions sustainable, the government is altering its e-commerce platform, GeM. The move is one of the initiatives of the Modi regime to create a safe business ecosystem for MSMEs. By proposing this idea, the regime aims to digitize the purchase of goods, as well as services, by several government bodies and public sector agreements.
Before the advent of GeM, the government ministries used to purchase goods, as well as services, from director-general for supplies and disposal (DGS&D).
So far, GeM proclaims to have hosted 266k sellers as well as service providers, have an aggregate transaction value of INR 17,000 crore, as per FY19 figures. The platform has a customer base of 37,000, including government and public sector, according to the cited media report.