This post has been self-published on Youth Ki Awaaz by Amlan Chaudhuri. Just like them, anyone can publish on Youth Ki Awaaz.

Is The Local Kirana Store Under Threat From The E-Commerce Industry?

More from Amlan Chaudhuri

By Amlan Jyoti Chaudhuri:

E-Commerce vs local retailers
Image Source: Google

Looking back at the evolution process, e-commerce was introduced in India through shopping sites like Rediff, Indiatimes, Sify and HomeShop18 in the early 2000s. However, they failed to gain widespread recognition amongst the Indian masses due to their limited range of products and payment options. With advancement in technology and growing manpower, e-shopping has gained significant success and popularity in the last couple of years. But there is a major policy gap, which needs to be addressed.

Background

A major controversy surrounding the industry is the competitive threat it poses to the brick-and-mortar retail industry. The Indian e-commerce industry is characterised by its ‘marketplace model’ in which online portals do not have ownership of the goods being sold. E-commerce companies are carrying out B2B activities where they are not directly doing business with consumers but rather acting as facilitators or middlemen between the retailer and the consumer. The retailer lists its products on the e-commerce website, the consumer chooses from the website and places an order. The roles of e-commerce firms end once they inform the retailer about the placed order. From here the retailer takes over and carries on with the delivery.

A petition was filed by the Retailers Association of India (RAI) and the All India Footwear Manufacturers and Retailers Association (AIFMRA) arguing that e-commerce companies have been acting like retailers which is in violation of the current FDI norms. Confederation of All India Traders (CAIT) further questions how these e-commerce platforms offer such massive discounts when they have no inventory at their disposal. AIFRMA in their Delhi HC petition argued that e-commerce marketplaces in India operate as retailers since the payment, delivery, returns and refund are all handled by these companies.

The Kerala High Court had admitted a petition from the Mobile Retailers’ Association that accused e-commerce firms including Amazon, Flipkart, and Snapdeal of FDI violations, alleging that e-commerce firms enter into exclusive bulk deals with manufacturers to sell their Mobile phones only on their respective websites and nowhere else. Such strategies would wipe out traditional sellers.

Though there have been reports that Flipkart may have to pay a penalty of Rs.1, 400 crores, no such action was taken in the end, despite evidences. This points to a certain amount of policy capture where e-commerce groups are being protected.

Competition Commission of India (CCI) has also given a clean chit to all e-commerce firms. The reason it cited for the favourable judgement was the fact that e-commerce sector is still a growing market and holds only 5% share in the entire retail sector and therefore, it cannot be a threat to its competitors.

Research

The study was conducted in 3 cities: Hyderabad, Kolkata and Bangalore. A total of 150 small retailers and traders were surveyed. The objective was to gauge the impact of the advent of e-commerce on the sales and profits of these traders.

The results for the change in revenue and profits for the year 2014-15 have been shown in the graphs below:

1

Figure 1: Change in turnover: 2014-15

2

Figure 2: Change in profit level: 2014-15

The same results were also captured for the year 2015-16. Here 2015-16 refers to the period April 2015 to December 2015. The results for the final quarter of the financial year 2016 could not be captured since the survey was undertaken in the month of December-January of the same year. The results for this period have been illustrated in the graphs below:

3

Figure 3: Change in turnover (2015-16)

4

Figure 4: Change in profits (2015-16)

The above figures show that the number of traders who experienced a negative impact of the growth of e-commerce were outnumbered by those who were not.

Besides the quantitative survey, conversations with some of the cooperating traders provided further insights into the ground realities of the market competition structure between online and offline retail traders. The overall traders’ perception was that e-commerce had actually increased the footfalls in their business. Though there has been no cost reductions or competition advantage as such, some traders admitted that competition from the e-commerce industry has helped their business. Consumers check prices and product catalogues online, then look up the same product offline. Provided price negotiations are fair, this results in the product being sold. The consumer may also end up purchasing other products that they may come across in this process. Thus, competition has enhanced the footfall of the retail outlets, thus giving their business a boost.

The survey also posed questions about whether or not the traders were interested in joining hands with e-commerce firms to expand their business further. The results of this has been illustrated below:

5

Figure 5: Traders’ inclination to tie-up with e-commerce firms

It may be noteworthy to mention that the traders willing to collaborate with e-commerce firms include those who considered e-commerce to be a threat as well as others who gained from the increased competition.
It can thus be concluded that at present the e-commerce industry is not that big a threat to the small retailers. On the contrary, it has opened up newer domains to expand into.

Conclusion

From the analysis of the various facets of the industry, two broad conclusions can be arrived at.

There is an information gap between the industry and all other players of the society. The current structure of self-regulation is not the solution to this problem. This can only be rectified through the establishment of a trustworthy and reliable regulatory institution. The regulatory body would act as a mediator that would instil confidence of the society on the e-commerce industry.

There is also a need to amend the FDI policy. The policy should be designed in a manner that would encourage foreign investments while also encouraging e-commerce collaborations with local traders.

The above concept of a collaborative retail sector could be implemented through tax exemptions on online-offline collaboration in the initial years or other incentive-based policies. This investment could take the form of sourcing another domestic firm or investing in ancillary sectors such as logistics, warehousing, etc. These policies would counter-balance the increased dependence on foreign countries with improvements in domestic infrastructure.

This two-phase policy of restructuring the industry would help integrate the retail sector and enable optimal growth of the industry, and the economy as a whole.

You must be to comment.

More from Amlan Chaudhuri

Similar Posts

By Priyanshi Mehra

By Abhinandan Kaul

By Imran Khan

Wondering what to write about?

Here are some topics to get you started

Share your details to download the report.









We promise not to spam or send irrelevant information.

Share your details to download the report.









We promise not to spam or send irrelevant information.

An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

Share your details to download the report.









We promise not to spam or send irrelevant information.

A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform Change.org, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on Change.org has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in Change.org’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

Sign up for the Youth Ki Awaaz Prime Ministerial Brief below