E-commerce benefits consumers but has scope for harming small retailers.
The issue of co-existence of organized and unorganized sectors in a developing country like India is not new. While the debate persists, specifically in the services sector, a relatively new (though related) variant of the problem now concerns the co-existence of traditional brick-and-mortar sellers with online marketplaces (so-called e-commerce aggregators), such as Flipkart and Amazon. It is well known that these e-commerce platforms have in the past decade-and-a-half assumed a significant role in providing benefits to consumers in terms of ease of shopping, saving travel time, providing after-sale services, etc. While growing in the Indian market, they have also created a large number of warehouses and supply jobs. In fact, some surveys suggest that this medium provides an added advantage to small home businesses, which do not need a physical set-up to market their products, and hence encourage the entry of new firms. The positive spillover effects have also been witnessed by the fintech industry, as many consumers and producers now prefer digital transactions.