E-commerce Can Propel Exports : Daily Current Affairs

Date: 14/02/2023

Relevance: GS-3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development, and employment.

Key Phrases: E-commerce, B2B (Business to Business), B2C business to consumer, B2E (Business to employee), C2C (Consumer to Consumer), Made in India.

Context:

India has come a long way since the decade of the 1990s when its exports were mostly led by the services sector.
India’s manufacturing sector has grown 3X in FY22 with contributions from traditional sectors like petrochemicals, steel, cement, and automobiles, as well as new sunshine areas like electronics, toys, and others.
E-commerce is dramatically opening up the global market for Indian entrepreneurs at scale and this has changed the fate of ‘Made in India’ products.

Key Highlights:

The last couple of years has brought about a structural shift in shopping, with more and more customers across the world choosing to shop online.
There are an estimated 2.14 billion online shoppers globally and the number continues to grow rapidly.
This presents a fantastic opportunity for businesses in India to start thinking about the global opportunity more seriously.
With wider availability of internet, rising e-commerce marketplaces, manufacturing on demand, easier access to capital, and variable models for logistics and shipping, Indian entrepreneurs can plug themselves into global supply chains and create strong exports businesses.
We are already seeing the rise of the D2C revolution in India where new-age brands from different corners of India are serving customers across the country and the world.
Industry estimates suggest that there are over 800 successful D2C brands in India today, with a sector valuation of over $40 billion.
These brands and thousands of others have a gold mine of underserved needs from customers across the world to cater to.

Types of e-commerce

B2B (Business to Business) the largest form of E-commerce. This model defines that buyer and seller are two different entities. It is similar to manufacturer issuing goods to the retailer or wholesaler.
B2C business to consumer refers to communicating with selling to an individual rather than a company, online shopping can be faster and more convenient. The offerings and prices can change instantaneously.
B2E (Business to employee) refers to the requisitioning of supplies by employees for use in jobs, but this really has grown to encompass much more. B2E has grown into technologies that allow employees to access their employee records to update address information.
C2B (Consumer to Business) A consumer saves his project with budget online and companies review it according to the requirement and bid on the project.
C2C (Consumer to Consumer) helps the online dealing of goods or services among people.

Significance of E-Commerce:

Sell directly to customers:
- E-commerce exports enable businesses to sell directly to customers across the world.
Much larger pool of customers :
- It helps businesses transcend boundaries and get access to a much larger pool of customers.
Easy to adopt and scale :
- It also provides an ‘easy to adopt and scale’ mechanism for MSMEs to grow their business outside India, without having any footprint locally in international markets and reducing dependence on intermediaries – bringing the ‘seller’ closer to the ‘customer’.
Creates a level playing field :
- E-commerce creates a level playing field for any kind of business to access global markets.
Does not require massive investments:
- It dispels the notion that exports are meant for larger businesses that can make massive investments to take their operations overseas.

Technology Meets Trade:

A lot of work is happening in the ecosystem with government agencies and private players working to integrate technology at every step of the export lifecycle.
The immediate priority areas we need to focus on to fuel e-commerce exports are:
- creating more awareness about e-commerce exports on the ground;
- leveraging digitisation to smoothen exports-related processes, and
- building effective yet low-cost logistics solutions.
Digital India has lent a solid impetus to other government-led initiatives such as
- Start-Up India and
- Aatmanirbhar Bharat;
The Government has taken steps to encourage cross-border trade such as
- free-trade agreements between countries such as the UAE, the UK, Australia, and others, which have led to rise in exports.
We need to continue taking a series of bold steps and simplify and contextualise some current policies to lend a further push to exports.
The good news is that this thinking resonates with several directional changes that the Government has brought into effect in recent years and continues to do.

Conclusion:

As the world stares at a period of economic uncertainty, it won’t be wrong to say that exports through e-commerce — the perfect blend of technology and economics — could be a game-changer for India.
This decade will be a key period in India’s economic growth story and can propel it to become a leader in international trade.
To achieve this, a trident combined force of the Government, MSMEs, and the industry will have to work together to unlock the huge cross-border trade potential that lies ahead of us.
The success mantra will largely depend on how well they innovate on behalf of customers and harness the power of technology to meet customers right where they are… whether in Lucknow or in London.
Furthermore, an in-depth understanding of the prevailing challenges in this relatively new segment and developing potential policy and strategy solutions for them are the need of the day, with work cut out for academics, experts, and policy analysts.

Source: The Hindu BL

Mains Question:

Q. How e-commerce can play a big role in boosting exports from India? Discuss (150 words).