FDI in e-commerce will help SMEs scale operations, reach

Pushing for introducing FDI in B2C e-commerce, industry bodies and e-commerce firms have said such moves will help SMEs scale up their operations and aid expansion into smaller parts of the country.
Players like Fashionandyou, Yebhi.Com and ShopClues along with industry bodies like Nasscom and IAMAI said allowing foreign direct investment (FDI) in business to consumer (B2C) e-commerce will allow smaller firms raise the much-needed finance from international markets to fund expansion plans.
Currently, India does not allow foreign direct investment (FDI) in business to consumer (B2C) e-commerce. Many international players operate in India through the marketplace model.
While many parties, including industry body CAIT, have contended that allowing FDI in the sector will "cannibalise" brick and mortar retail stores, IT industry body Nasscom said there is space for both formats to function simultaneously.

"Globally, in countries where e-commerce has been around for 10 years as well, there is little evidence of such an impact. Further, e-commerce will primarily benefit us by connecting and reaching the underserved markets which will help expand the overall market size," it said.
Internet and Mobile Association of India (IAMAI) added that the sector has a huge potential of generating jobs.

"e-tailing, which is just 16 per cent of the e-commerce market today would grow to 30- 35 per cent by 2020 and is estimated to generate employment for around 1.5 million people by 2020," IAMAI President Subho Ray told PTI.

Besides, it has also helped micro, small and medium- sized businesses to reach out to millions of customers across geographies.
E-commerce, especially marketplace platform, helps them jumpstart their business with minimal investment, he said.
Homegrown online marketplace major Flipkart said global marketplaces like eBay are already operating in India.
"Alibaba and Rakuten can enter India, as no regulations prevent them from doing so. We operate as a marketplace and the opening up of FDI in inventory based e-commerce has no bearing on us," the Bangalore-based firm added.
Global e-commerce giant Amazon also believes allowing FDI in B2C e-commerce will positively impact infrastructure development in the country.

"We believe opening up this sector to FDI will be good for consumers and Indian businesses as it would allow us to partner with local manufacturers to source products not carried by other sellers on the marketplace, giving Indian consumers unique and wider choices at lower prices," an Amazon India spokesperson added.