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Policy

Published on: June 17, 2020, 3:56 p.m.
Elusive policy
  • A policy remains undelivered

By Rakesh Joshi. Executive Editor, Business India

India has recently recorded the sharpest surge in e-commerce adoption across multiple categories compared to other markets, including China, Brazil, Indonesia, Thailand and the Philippines. These are the findings of a study by Facebook India and Boston Consulting Group. Yet, the country does not have an e-commerce policy and the government is still working on one.

The Department for Promotion of Industry and Internal Trade (DPIIT) will soon put yet another draft e-commerce policy in the public domain to seek views and comments before giving it the shape of a final policy. Last year too, the government released a draft national e-commerce policy proposing a legal and technological framework for restrictions on cross-border data flow, and also laid out conditions for businesses regarding the collection or processing of sensitive data locally and storing it abroad.

Several foreign e-commerce firms had raised concerns over some points in the draft pertaining to data. Also, the government was preoccupied with the general elections that followed.

With e-commerce a fast emerging sector now owing to the social distancing norms being put in place to combat the coronavirus pandemic, it is now recognised that the country should have a definite, clear and coherent policy which is in tune with the requirements of society and service providers. Guruprasad Mohapatra, secretary, DPIIT, says it is difficult to predict where e-commerce will go in the next couple of years. The Covid-19 pandemic had led to unprecedented changes in consumer behaviour. 

Online buying

The Facebook-BCG study found that 33 per cent of respondents in India expect to buy household care products online in the next month compared to 19 per cent respondents in China, 18 per cent in Indonesia, 4 per cent in Brazil and 9 per cent in Thailand. The Philippines reported negative growth of 6 per cent in preference towards the e-commerce channel.

Similarly, for personal care, fresh food and packaged food categories, 44 per cent, 31 per cent and 34 per cent Indian respondents respectively led the table showing a maximum preference for online buying in comparison to the buyers in the said countries. For health supplements, 47 per cent of Indonesians expect to choose e-commerce routes followed by 43 per cent of respondents from India.

In addition, about 50 per cent of consumers expect to increase their e-commerce spend in the coming month even for traditionally offline categories like vitamins, supplements, personal care products, cosmetics and non-prescription medicines. Spending on health and hygiene is expected to increase by more than 40 per cent over the next six months.

Nimisha Jain, managing director and partner at BCG, says that these unprecedented shifts in consumer attitudes and behaviours will not be temporary. “Many will last longer and become more defining traits. Over 80 per cent of consumers will continue to practice social distancing and are bringing the outside inside, over 40 per cent are dialing up on health and wellness spends, e-commerce adoption has already advanced by two to three years, to name a few,” she added.

However, the report also found that 43 per cent respondents said that they plan to reduce the overall spend in the next six months. And more than half of them added that they will still buy a cheaper brand or a variant, while 54 per cent of respondents expect overall household income to reduce in the next six months.

Jain noted that only one out of six companies would come out stronger once this crisis is over, adding that players who are effectively capable of reinventing their value propositions, go-to-market plans and business models would be the ones that set themselves apart from the pack.

Mohapatra throws light on areas that require clarity. “So, the e-commerce policy firstly should lay down a very clear policy on what is data; what kind of data the e-commerce companies can use; how the citizens’ right of privacy can be protected; how the e-commerce data is being leveraged for other purposes, other commercial benefits accrue to the e-commerce data holder; how citizens like you and me can have access to those benefits.

“Secondly, there are a lot of counterfeit and inferior products and violation of various safety standards. How can these be taken care of, how can consumer rights be protected... We have now finalised a (draft) e-commerce policy; very soon, we will put it in the public domain,” he added.

E-commerce players will be hoping that this time around, the draft will take the shape of a final policy.

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