'Not A Matter Of Pride': Piyush Goyal Raises Red Flags Over Rapid Growth Of E-Commerce Firms In India

Union Commerce Minister Piyush Goyal on Wednesday (21 August) questioned whether the rapid expansion of e-commerce companies in India should be seen as a "matter of concern" or a source of pride.

Goyal's remarks came in response to a report predicting significant growth in the e-commerce sector over the next decade.

"Are we going to cause huge, social disruption with this massive growth of e-commerce? I don't see it as a matter of pride that half our market may become part of the e-commerce network 10 years from now; it is a matter of concern," Goyal said, Moneycontrol reported.

The minister made these remarks during the launch of the report titled 'Net Impact of E-Commerce on Employment and Consumer Welfare in India'.

Goyal clarified that he is not against the e-commerce industry, which is here to stay, but emphasised that its role needs to be shaped in a more orderly manner.

The minister noted that e-commerce does not dominate every sector of retail, highlighting that only a minor portion of the population buys food and groceries through these online platforms.

While acknowledging the e-commerce industry's role in the country, Goyal stressed the importance of carefully reviewing and organising that role.

"We have to think carefully about what that role is and how it can be more organised. Is predatory pricing policy good for the country?" he questioned.

Goyal further elaborated on the concerns of predatory pricing, questioning the enthusiasm surrounding significant investments from companies like Amazon.

He said that these investments may not truly benefit the Indian economy as they seem.

"When Amazon says we are going to invest a billion dollars in India and we celebrate, we forget the underlying story that this billion dollars is not coming for any great service or investment to support the Indian economy," the minister argued.

He also questioned the legal framework surrounding the operations of these companies, particularly how they manage to sustain such substantial losses.

"They made a billion-dollar loss in their balance sheet that year, they had to fill in that loss... If you make Rs 6,000 crore loss a year, doesn't it sound like predatory pricing to you? They are, after all, an e-commerce platform; they are not allowed to do B2C legally. However, in reality, all of you buy on these platforms. How are they doing it? Should it not be a matter of concern for us?" Goyal asked.

The commerce minister also pointed out the adverse effects of e-commerce on small traders, in contrast to large retailers like Apple, expressing regret over the dwindling number of small mobile stores.

"How many mobile stores do you see now on the corner? And how many were there 10 years ago? Where are those mobile stores? Will only Apple or the large retailers sell mobile phones and their accessories?" he questioned.

Goyal wrapped up his remarks by cautioning against the disruption likely to be faced by the 100 million small retailers across India, as the market share of e-commerce continues to grow by 27 percent each year.

He stressed the need to use technology for empowerment, innovation, and fulfilling consumer demands, while making sure its advantages reach a broader segment of society.

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