E-commerce has caused widespread controversy around the world, is it a good medicine or a poison? Recently, the Indian government enacted a new E-Commerce Rule to more strictly regulate the industry, and this is not the first time India has taken such action. In fact, around the world, many countries have begun to impose sanctions and even restrictions on the e-commerce industry. Together with the United States, the birthplace of Amazon, it has also adopted some restrictive measures for the e-commerce industry. In addition, the Indonesian government enacted a bill in September to ban business transactions through social media. Coupled with the fact that the Indian government has repeatedly expressed its intention to close e-commerce, this has raised questions about the e-commerce model.
However, when we think deeply, we see that the rise of e-commerce in India has actually brought a huge economic impetus to the country. According to statistics, India has become the most populous country in the world, with a population of 1.41 billion, surpassing China. India has 700 million internet users, the second largest in the world after China. This huge population provides a huge user base for Indian e-commerce, laying the foundation for the booming development of this industry.
E-commerce sales in India have also been climbing, up 44 per cent y-o-y from Rs 25,000 crore in 2020 to Rs 36,000 crore in 2021. The rise of the e-commerce industry has also driven the development of logistics, mobile payment and other related fields, further promoting India's industrial upgrading. In addition, many Indian entrepreneurs can now sell their products to every resident in the country through e-commerce platforms. This not only provides a sales avenue for some Indian artisans, but also creates a wider range of sales opportunities in rural India. This market opportunity has attracted international giants such as e-commerce giants Amazon and Alibaba to enter the Indian market and cooperate with local e-commerce platforms, giving Indian products the opportunity to enter the global market.
However, despite the success of the e-commerce industry in India, the Indian government suddenly introduced new "e-commerce rules", sanctioned the e-commerce industry, and even intended to completely close e-commerce. This is not just the case in India, but also in a growing number of countries around the world, including the United States, where Amazon is headquartered. In April, Hangzhou, China, also issued a ban on live streaming in the Four Seasons Evergreen Market, and the fines were even quite high. Southeast Asian countries such as Indonesia have also taken drastic measures to ban the trading of goods through social media.
However, this restriction of the e-commerce industry can lead to bigger problems. India is a country with a population of 1.4 billion, and the crackdown on the e-commerce industry is bound to lead to mass unemployment. As Jack Ma once warned, this will lead to millions of job losses in the country. In India, e-commerce platforms provide employment opportunities for a large number of people, covering everything from software development to courier, from businesses to farmers. If India cracks down on the e-commerce industry, it will lead to massive job losses, especially in cities like New Delhi, where there are thousands of small and medium-sized e-commerce companies employing hundreds of thousands of employees and hundreds of thousands of couriers. Once e-commerce goes out, these people will lose their jobs overnight.
In addition, restricting the e-commerce industry risks undermining the ability to innovate, as India's e-commerce industry attracts the country's top technologists and young entrepreneurs to the country. Once e-commerce stops, these talents may flow abroad, leading to a large-scale loss of domestic talent.
However, the reason why the Indian government took this measure is that the e-commerce industry has caused a huge impact on the traditional retail industry, resulting in a decline in the real economy. Behind these restrictions are actually measures taken by the government to safeguard domestic economic sovereignty. But we must recognize that e-commerce and the real economy are not opposites, they are interdependent and mutually influencing. The real economy is the foundation of e-commerce, and e-commerce is an extension of the real economy. The e-commerce economy and the real economy should pursue harmonious development, rather than mutually exclusive. Only by finding a balance can e-commerce and the real economy prosper together and create more opportunities for the development of the Indian economy.
To sum up, the rise of e-commerce in India and the pros and cons it brings is actually a complex issue.