Govt’s e-marketplace aims to pip Amazon, Flipkart in transactions
GeM, which records transactions worth $1.5 billion at present, aims to raise this figure to $25 billion in three years
New Delhi: The government’s public procurement website, GeM (Government e-Marketplace), through which it buys goods and services for its consumption, aims to record more transactions than e-commerce giants Amazon India and Flipkart put together.
GeM, which records transactions worth $1.5 billion at present, aims to raise this figure to $25 billion in three years. Amazon India and Flipkart, including Myntra, record online transactions of about $12 billion at present.
“GeM will be doing transactions worth $25 billion in three years and $100 billion in seven to eight years,” trade minister Suresh Prabhu said on Wednesday while inaugurating the National Mission on GeM for increasing awareness among buyers and sellers.
However, it is unlikely that government will be able to list GeM in the equity market anytime soon as it is registered as a not-for-profit company, though Prabhu speculated about its probable valuation.
“GeM will be a very valuable possession for the government. If we list it, we don’t know how much value we will get,” he said.
“Making profit is not the mandate of GeM as it is registered as a Section 8 company. However, in future, if the government so wishes it has to change the nature of the company into a for-profit one,” a GeM official said under condition of anonymity.
GeM, which has replaced the public procurement wing called the directorate general of supplies and disposals (DGS&D), deploys technology to completely automate procurement processes and systems, introducing greater accountability in public procurement across India. Most states now buy requirements such as laptops, car rental services, and medicines for anganwadis using the GeM platform. Now GeM wants all local bodies also to buy using its platform, which will ensure transparency and cost savings.
The government also intends to allow private companies to buy on the government e-marketplace platform, which will help further lower the cost of goods and services for governments, said the trade minister.
“If somebody else wants to buy on the GeM platform, they will also be allowed to do so. If volume increases, price will also come down and this will benefit both the government and private parties,” he said.
However, Prabhu said the time frame for that will be worked out after verification. “On the GeM platform, we are guaranteeing payment in 10 days. If we register private buyers, we have to make sure they make payment in 10 days. In the government, we can give that guarantee. So we have to put a system in place,” he said.
In two years of its operations, GeM has recorded more than 725,000 transactions worth more than ₹11,250 crore and established itself as an open, transparent, efficient and inclusive platform providing huge savings to the government.
The portal has nearly 27,000 buyer organizations registered and about 137,000 sellers and service providers offering more than 465,000 products and services for online purchase and contributes to approximately 20-25% average overall savings to the government.
GeM aims to make savings worth 1% of the gross domestic product in the next three years and aims to eventually make savings that could wipe out the fiscal deficit of the central government.
Editor's Picks »
- The concept of side-pocketing, how it matters
- Apple CEO Tim Cook says new tech regulation ‘inevitable’
- Date of acquisition for under-construction house a matter of debate
- Explained: What is top-up health insurance and how should you use it?
- Retail investors skewed towards equity asset; it is time to shift from products to solutions