Flipkart’s Big Billion Fiasco a Rarity, Should Not Over Regulate Sector

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Flipkart’s Big Billion Fiasco a
Rarity, Should Not Over Regulate Sector
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In a bid to ward off concerns regarding Flipkart’s Big Billion Day fiasco, industry body ASSOCHAM has suggested that such a blooper is a one-off case and should not be used as a ploy to over-regulate the booming sector. The association also noted that the concerns raised on the entire sector because of the mega sale failure will hurt consumers’ sentiments before Diwali.

“After the promoters of the company have expressed regrets and have assured customers to address the technical issues that may not have been expected to crop up, the matter should rest here. To suspect a mala fide on the part of Flipkart or to paint the entire e-commerce business with a brush of doubts will be wrong. If at all any regulatory issue is involved, let it be dealt within the existing laws concerning interests of the consumers,” said D S Rawat, secretary general of the chamber.

He added, “Subjecting this sector, which holds big promise in terms of creating new market among the aspirational middle class consumers will kill the business in its infancy, denting the entrepreneurial spirit of the promoters, most of whom are young and people willing to try out new ideas.”

It is worth noting that the unorganised retail is pegged at about $550-600 billion while the organised retailers have only managed grow to nearly $25 billion to $30 billion. On the other hand, the eCommerce has rapidly grown to about $3 billion to $4 billion in the past few years.

“But given the kind of enthusiasm both on the part of the e-commerce players and the consumers, the sector holds a great promise of $15billion to $18 billion in the next three years. What is noteworthy about the eCommerce phenomenon is that it is attracting a lot of first-generation young entrepreneurs besides the global players like Amazon and eBay, who are showing great interest,” noted Rawat.
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Experts have suggested that in the coming time, a major part of the existing retail market will be dominated by eCommerce, marking a significant shift from the brick and mortar form of retail industry. In addition, the online delivery platform has been creating demand in several areas like books, music, premium goods like sun glasses and branded spectacles among the other traditional products.

“The demand for books, especially the non-educational in the brick and mortar era, for instance, was also a function of the time availability of going to book stores…..But with online shopping, the demand in this segment has seen a sharp increase Thus, the e-commerce has only created an additional market for the books,” averred Rawat.

On the policy front, the chamber asked for more clarity in terms of the foreign direct investment. Taking note of the concerns of the traders regarding FDI in traditional retail sector, the association emphasized that a 100% FDI in eCommerce is feasible as the local retailers and traders will not be adversely affected by the kind of technology-driven delivery platforms and the supply chain linked to e-tailing.

“In an era of technology, e-tailing is something which we cannot afford to miss or stop. Besides creating new types of demand among the middle class people, the eCommerce will have a sobering impact on the excessive cost of commercial real estates. To assume that e-tailing will spell doom for the organised retailing in the malls and traditional markets will be an incorrect assessment”, asserted Rawat.