Technology will drive compulsive consumption: Paytm founder
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New Delhi: New technology driving e-commerce in the country will increase compulsive consumption and grow the economy further, Vijay Shekhar Sharma, founder of Paytm said on Friday.
"Technology adds to consumption. It’s not a zero sum game," Sharma said at a session of the India Economic Summit in the capital on Friday, which was moderated by NDTV founder Prannoy Roy.
Sharma was responding to a question on whether e-commerce is a threat to small retailers.
He said technology will lead to more compulsive buying as things become easier to buy.
Sharma said that more than technology what small retailers are increasingly worried about is firms "throwing big money" around that upsets the equilibrium in the marketplace.
He made the comments with the disclosure that China’s Alibaba Group holds close to 41% stake in One97 Communications Ltd, which runs Paytm, and has aggressive plans to build a presence in the Indian market.
Paytm, at a group level, notched up close to Rs.2,000 crore in gross merchandise value (GMV, or cost of goods and services sold) in July, placing it right next to larger Internet rivals Flipkart and Amazon India.
SpiceJet's senior vice-president and head of inflight-services Kamal Hingorani said the travel space was a good example of how offline businesses managed to overcome the threat posed by online service providers. Travel agents that feared closure after the arrival of online travel agents like MakeMyTrip.com had survived because they personalized their services.
Niti Aayog chief executive officer Amitabh Kant said small retailers must embrace technology.
Sharma said India has the opportunity to create start-ups for the world. Japan, he pointed out, first made cars to suit local needs and later took them to the world and now it sells most of its cars in the US.
While the disruption will cause some worry, the government should step in only when really required, said Gita Gopinath, professor of economics, Harvard University.