E-commerce industry an opportunity basket for SMEs: Experts

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Vaneeta Punchvedi | 20 Aug, 2014
E-commerce industry is a basket of opportunities for small and medium enterprises (SMEs) especially the young generations as it is the platform, which provides new jobs, services and new technology to the start-up entrepreneurs in all over world, said industry experts at the ASSOCHAM 'e-Commerce India Conclave' in New Delhi on Tuesday.

"E-commerce is capturing the market rapidly, internet users in the country are growing day-by-day in the countless numbers. And as the Internet users number increase the e-commerce will grow," said Bikky Khosla, Chairman, ASSOCHAM National Council on e-commerce and CEO, Tradeindia.com.

"We have the 3rd largest population of internet users in the country but even today our population to internet user is only 15-17 percent to internet users in US and China this shows scope of opportunities in e-commerce. An estimate said that by 2017 we will have around 300 million internet users and along with will have around 200 million mobile internet users. Now more people are connected to the internet by their phones as compare to their desktops. So in coming days everybody using e-commerce should have mobile strategy," he added.

While addressing the conference Kalyan R. Krishnamurthy, CFO of Flipkart Internet Pvt. Ltd said, "e-Marketplaces provide many benefits to the retail ecosystem like job creation & skills training, Innovation ecosystem and access MSMEs, women & rural entrepreneurs build own brand and sell to new customers across the nation without stepping out of their workplace via e-marketplaces."

"E-commerce growth is tremendous in India but we are far behind the world," said Dr. Ajay Dua former Secretary, Ministry of Commerce and Industry.

Apex industry body has also released a study titled, 'Evolution of e-Commerce in India', jointly conducted by ASSOCHAM and PWC at the Conclave.

According to study Indian e-commerce industry is expected to spend an additional 500 to 1,000 million USD on Infrastructure, Logistics and Warehousing, leading to a cumulative spend of 950 to 1900 million USD till 2017-2020.

The study has mapped the enormous positive impact of the sector on infrastructure, logistics and warehousing. E-commerce providers are now entering a different paradigm of operations, where efficient management of the supply chain is core to the business.

The study further indicates the investments that the E-commerce companies will have to make in building large fulfillment centers and warehouses, downstream parcel and sorting centers, equipping these nodes with state-of-the-art technology and modern warehousing practices promoting viability across the logistics chain.

The study estimates that over the next three to four years, there will be an addition of 7.5 to15 million square feet in the form of fulfillment centers indicating an additional 6 to 12 percent of all the space available in the form of organised warehousing in India and almost 25 to 50 percent of all incremental addition of consumption-driven warehousing space in the same period.

To enhance the reach further, additional sorting and delivery centers will also be critical. Such additional centers with each measuring around 10,000 to 20,000 square feet will be added, said D.S. Rawat, secretary general of ASSOCHAM while releasing the study.

Commenting on the report, Saurabh Srivastava, Director, Operations, PwC said, "The growth of the E-commerce industry has a huge potential in the country translating into beneficial effects for the manufacturing industry, infrastructure and jobs. In our white paper we have tried to highlight the spill-over effect of the growth of E-commerce on infrastructure and logistics investments which will include more warehouses and delivery centers and employment."

"The potential of the sector and the likely liberalisation in the form of FDI could be a vital factor in attracting significant investments resulting in better infrastructure and robust supply chains," he added.