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Amazon to invest 1 billion USD in India; Create 1 million jobs

On January 17, 2020, one of the world’s largest retailer Amazon announced that it has planned to invest 1 billion USD in India and generate 1 million jobs. Globally Amazon has increased its employee base four times.

Highlights

The retailer has been constantly facing rage of the small and medium enterprises in India for its discounts. In order to involve small and medium businesses, a mega summit called the smBhav was organized by Amazon in the capital on January 14, 2020. Around 3000 small and medium entrepreneurs attended the summit.

Analysis

According to the National E-Commerce Policy, 2019, the Indian E-Commerce market is estimated to reach 200 billion USD by 2026. As India is one of the largest markets in the world, the foreign E-Commerce giants are competing with each other to capture Indian market. This 1 trillion USD and smBhav moves of Amazon are best examples.

While it is important to allow the growth of the market, it is also equally important keep the factors influencing the growth at check. It includes

  • Regulation of customer data
  • Stimulating domestic digital economy
  • Regulatory issues
  • Export Promotion through E-Commerce. This is the most important factor as India should neither be used as dumping yard for foreign products nor be used as a service provider for foreign E-Commerce giants. Rather, local Indian goods and products should grow in terms of production making India a net exporter.

Legislation

The principal legislation that is governing e-commerce in India is the IT act.

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CCI report on E-Commerce Market of India

On January 8, 2020, the Competition Commission of India (CCI) released its report on “Market Study on E-Commerce in India: Key Findings and Observations”. The market study for the report was initiated in April 2019 by CCI.

According to the report, the number of internet users have increased from 445.96 million in 2017 to 665.31 million in 2019. This is the primary reason for the fast growth of the E-Commerce sector in the country.

Key Findings of the Report

  • The revenue from the E-Commerce sector is growing at the rate of 51%.
  • In July 2018, the number of online transactions in the E-Commerce sector was 1 to 1.2 million per day.
  • Between 2016 and 2019, the delivery market places in food industry raised by 90%. Also, the food industry is no longer a metro phenomenon. It grew in non-metro cities as well.
  • The online travel booking is growing at 16% since 2016.
  • The E-Commerce Sector was established in 2009. However, the sector gained momentum in 2014. In 2017, the sector held 3,500 million USD investment. There are around 4757 E-commerce start-ups in India today in 2019.

Suggestions

  • To reduce information symmetry and increase transparency. This will increase competition among the stake holders.
  • To set out terms and conditions that will prevent the business users from influencing search ranking.
  • To set up a transparent policy on data collection of customers, product rating policies.

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