While acknowledging the importance of technology and its role in consumer convenience, Goyal emphasized the need for a cautious and organized approach to its growth, particularly due to its impact on traditional retail sectors and the broader economy.
‘Going out for dinner or coffee with friends are essential for human development’
Goyal underscored the importance of assessing the broader implications of e-commerce on traditional retail businesses. “I’m not wishing away e-commerce—it’s there to stay,” he stated. However, he stressed that the growth of e-commerce must be evaluated dispassionately, with a focus on its effects on sectors like restaurants, pharmacies, and local retail stores.
Goyal expressed concern about how the convenience of e-commerce might be shaping consumer behavior, particularly among younger generations. He warned, “Of course, we’ll end up becoming a country of couch potatoes, watching OTT and having food at home every day.” He emphasized that social activities like going out for dinner or coffee with friends are essential for human development. Referring to an Airtel advertisement, he pointed out how such activities foster connections, which are at risk of diminishing as more people turn to online solutions for everything from food to pharmacy needs.
Goyal expressed concern about the impact of e-commerce on local services, using the example of pharmacies. He reminisced about how local pharmacists used to personally oversee medication needs, like monitoring the use of Benadryl to ensure safe consumption. “I remember when I was a child, my local pharmacist would keep a watch if I bought too much Benadryl,” Goyal said. He questioned how such personal care and oversight could be replicated in the e-commerce environment, where online purchases lack the same level of personalized attention and community trust.
Predatory Pricing and Market Disruption
The minister also voiced concerns about predatory pricing strategies used by major e-commerce players, which he believes could be detrimental to the Indian economy. “When Amazon says they are going to invest a billion dollars in India, and we all celebrate, we forget the underlying story,” Goyal remarked, highlighting the potential for such investments to undermine local businesses.
He further questioned the legality and ethicality of certain business practices within the e-commerce sector, particularly the manipulation of business-to-business (B2B) and business-to-consumer (B2C) models to bypass regulations. Goyal urged the audience to consider the impact of these practices on small retailers and consumers across the country.
Lessons from Developed Nations: Switzerland’s Cautionary Approach to E-Commerce
Goyal also pointed to examples from developed nations, such as Switzerland, to underscore the potential risks of unregulated e-commerce growth. He noted that countries like Switzerland have been cautious in allowing e-commerce to flourish, recognizing the long-term consequences it could have on traditional retail and local businesses. “Why did Switzerland not allow e-commerce to come in until very recently?” Goyal asked, highlighting the need for India to carefully consider the impact on its own small retailers and the broader economy before fully embracing the e-commerce boom.
Impact on Local Businesses and Employment
Goyal also addressed the challenges faced by local businesses, particularly pharmacies, in the face of e-commerce’s rise. He shared personal anecdotes to illustrate the value of local pharmacists who knew their customers and provided personalized care—services that are difficult to replicate in an online environment.
Moreover, the minister highlighted the broader socio-economic implications of the e-commerce boom, questioning the long-term impact on employment and the livelihoods of small retailers. He noted the importance of maintaining a balance between technological advancement and the preservation of traditional retail jobs, which are crucial for many communities across India.
The Path Forward: Organized and Inclusive Growth
Goyal called for a more organised and citizen-centric approach to the growth of e-commerce in India. While acknowledging the role of technology in driving efficiency and innovation, he emphasized the need for this growth to be inclusive and beneficial to all sections of society.
“We’ll have to see that this grows in an orderly fashion,” Goyal asserted, urging stakeholders to consider the implications of e-commerce on small retailers and to ensure that the benefits of technological advancements are democratized across the country.