Edition: August 17th, 2021
Curated by the Knowledge Team of ICS Career GPS
- Excerpts from article by Ritu Bhandari, published on Firstpost.com
E-commerce is providing opportunities to a new generation of digital entrepreneurs, many of whom have been forced to start their own businesses following job losses.
E-commerce is helping India achieve a more inclusive growth by:
- Creating large-scale employment opportunities
- Enabling first-generation entrepreneurs
- Skilling youth
- Empowering women
- Formally integrating MSMEs from tier-2 cities and beyond in national and global supply chains
The popularity of online shopping, wider adoption of digital payments and increased use of social media such as Instagram, Facebook and WhatsApp for marketing have given many entrepreneurs the option to trade from home, without having to invest capital in renting stores or office spaces.
There have been some concerns that the online medium is hurting small sellers or offline retailers. However, we are seeing greater convergence of offline and online.
More and more offline business are supplementing their business models by going online and, thereby, increasing their market reach and access.
Increasing entrepreneurship; Creating jobs
India faces an elephant-sized problem related to its workforce — creating enough jobs for the one million people who join the workforce monthly. Our country needs a massive expansion in small enterprises in the private sector over the next decade to absorb this growing labour force.
E-commerce is motivating first-generation entrepreneurs to start and expand businesses, given the greater ease of doing business and lesser investments in online ventures compared to brick-and-mortar ones.
Unlike the requirements necessary to run a business from a physical building, e-commerce does not require storage space or infrastructure investment on the part of the retailer.
The sellers are no longer limited to their geographical location and can sell their products across the country including distant/new markets. This gives them access to a bigger customer base which has a direct impact on their sales & incomes, and also creates millions of jobs.
If Micro, Small and Medium Enterprises or MSMEs join an online marketplace of an e-commerce operator, they can focus on products and not worry about distribution.
Many e-commerce platforms provide complete logistics and payments support to the sellers.
Helping MSMEs access funding
E-commerce operators provide greater transparency, traceability and real-time accounting, thereby ensuring better tax compliance with minimal compliance / administrative cost.
- The MSME sector with 63 million units constitutes about 90% of all enterprises in India. It employs over 120 million people and contributes significantly to the GDP.
- More than 70% of these MSMEs are micro-enterprises, in active need of micro-finance. MSMEs have limited access to funding and have to resort to informal sources for loans.
- They end up paying higher rates on loans borrowed with high collateral.
With greater formalisation due to e-commerce, MSMEs will get better access to funding and growth markets.
More women in workforce
More than two in three women in India are not a part of the workforce.
E-commerce platforms are enabling aspiring women entrepreneurs to start their businesses with minimal investment – from the safety of their homes.
This is hugely empowering for women — helping them gain business acumen and financial independence, improve their lifestyle and reduce gender inequality.
E-commerce also fits in with various women-oriented welfare schemes started by the government to promote up-skilling and entrepreneurship among them.
Skilling and upward mobilisation
- It is estimated that more than 60 per cent of the young people joining the workforce have not completed college. Many e-commerce platforms offer training in soft skills to sellers, resellers and workers.
- These skills build the overall profile of the workers, which would be useful to them throughout their life personally, professionally and socially.
- This skilling also enables horizontal mobility across jobs, thereby increasing the income avenues for young workers.
- In addition, they provide vertical mobility, which will help workers learn the ropes and move up the career ladder – towards entrepreneurship.
- Increased formalisation of small businesses will help in better assessment of the country’s GDP and increase the government’s revenue by way of higher tax collection.
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(Disclaimer: The opinions expressed in the article mentioned above are those of the author(s). They do not purport to reflect the opinions or views of ICS Career GPS or its staff.)
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