OPINION I Economic Times

In the active markets of Varanasi, where traditional weavers have crafted intricate sarees for generations, a silent revolution is unfolding. It’s not just the hum of looms that fills the air, but the buzz of smartphones and the click of digital transactions. E-commerce, once considered the domain of urban India, is now weaving its way into the very fabric of rural and semi-urban life, transforming the landscape of employment and consumer welfare across the country.

In a country where employment opportunities are a critical concern, e-commerce has emerged as a powerful engine of job creation. The data tells a compelling story: on average, e-commerce vendors in India employ 54% more people than their offline counterparts. This is not just a quantitative increase but a qualitative shift in the nature of employment.

Take, for example, Amazon’s ‘I Have Space’ program, which partners with local kirana stores to facilitate last-mile deliveries. This initiative has not only provided additional income to small businesses but has also created a network of micro-entrepreneurs across India. Similarly, platforms like Flipkart have created extensive supply chains that have generated thousands of jobs in logistics, warehousing, and customer service, many of which are filled by individuals from small towns and rural areas.

What is particularly noteworthy is the gender dimension of this employment boom. E-commerce vendors are employing twice as many women as their offline counterparts. Companies like Naaptol are actively promoting female employment, especially in their customer service and logistics departments. This trend is significant in a country where women’s participation in the workforce has traditionally been low, and it underscores the potential of e-commerce to drive gender-inclusive growth.

As e-commerce grows, so does the adoption of technology. This technological upgradation has been a double-edged sword—while it has streamlined operations and increased efficiency, it has also raised concerns about potential job losses due to automation. However, the reality in India appears to be different. Instead of replacing jobs, technology in the e-commerce sector has created new roles and increased demand for skilled workers.

For instance, BigBasket, one of India’s leading online grocery platforms, has implemented advanced inventory management and logistics technologies. This has not only improved their operational efficiency but also created new jobs in IT, data management, and customer service. Similarly, UrbanClap (now Urban Company) has empowered skilled professionals—electricians, beauticians, and plumbers—by connecting them directly with customers through a digital platform. This model has created a new category of employment that didn’t exist a decade ago, transforming the way these professionals work and earn.

However, the benefits of technological upgradation have not been evenly distributed. Traditional artisans and vendors, especially those in rural areas, often struggle to keep pace with digital advancements. In Varanasi, for example, many traditional weavers find it challenging to adopt digital platforms due to a lack of digital literacy and access to technology. This digital divide poses a risk to the inclusive growth potential of e-commerce, highlighting the need for targeted interventions to ensure that all segments of society can benefit from this digital revolution.

The impact of e-commerce on consumer welfare has been profound. Convenience stands out as the primary driver, with consumers increasingly opting for online platforms due to the ease of access, variety of products, and competitive pricing they offer. The widespread adoption of services like Swiggy and Zomato, which have revolutionized food delivery in cities across India, exemplifies this trend. These platforms provide consumers with a multitude of choices, competitive pricing, and the convenience of doorstep delivery, which has become a significant value proposition for urban consumers.

However, while e-commerce has enhanced consumer welfare, it has also introduced new challenges. Grievance redressal remains a weak spot, as evidenced by the experiences of customers during festive sales on platforms like Flipkart’s Big Billion Days. Issues such as delivery delays and product quality complaints have surfaced, highlighting the need for better consumer protection mechanisms. Furthermore, while e-commerce is often seen as cost-effective, associated costs like shipping, exchange, and subscription fees have been on the rise, which could dampen consumer enthusiasm if not addressed.

Contrary to the "retail destruction" narrative, traditional retail in India is not being wiped out by the rise of e-commerce; instead, it is evolving. Many offline vendors are adapting to the digital age by integrating technology into their operations. Reliance Retail’s JioMart, for example, has adopted an omni-channel approach, allowing consumers to order online and pick up from their nearest store. This strategy blends the convenience of online shopping with the tactile experience of physical retail, creating a win-win situation for consumers and businesses alike.

Moreover, many local kirana stores have adopted digital payment systems like UPI, making transactions smoother and more aligned with modern consumer expectations. This integration of digital tools into traditional retail practices suggests that the future of retail in India lies in the coexistence and collaboration between e-commerce platforms and brick-and-mortar stores.

The e-commerce revolution in India is not just a shift in the way we buy and sell goods; it is a transformative force reshaping the economy, creating jobs, and enhancing consumer welfare. However, to fully realize the potential of this digital revolution, it is crucial to address the challenges it brings, particularly the digital divide and the need for stronger consumer protection. By fostering an environment where e-commerce and traditional retail can coexist and thrive, India can harness the full benefits of this new economic paradigm, ensuring inclusive and sustainable growth for all.