Evolution of retail eCommerce? A myth or reality

By Dr. Sambedna Jena, @sambedna

“If your business is not on the internet, then your business will be out of business” – Bill Gates, Founder of Microsoft.

In the current scenario, not only firms are promoting and advertising but also facilitating the trading process electronically. The digital economy has come a long way since internet was merely considered as a product of luxury to being a necessity. Businesses are now done wholly on the virtual space thus creating the need for competent and talented individuals who can maintain this platform effectively. The attractive salary packages and perquisites provided by such firms to its employees only makes it more alluring to the job seekers.

The pace of evolution on digitization was further amplified by the launch of “Digital India” campaign on 1st July, 2015 by the Indian Government. This campaign boosted the business potential of firms working on digital platforms and created a demand for competent personnel in the job market. The upscale vibes of this sector can be witnessed by the ASSOCHAM report of early 2016; which states that thousands of jobs are created by the eCommerce industries in India annually, with a growth rate of 60-65 percent. It has also predicted that hiring activities will elevate and about 2.5 lakh jobs will be generated solely by this booming sector. The latest study conducted by Internet and Mobile Association of India (IAMAI) states that eCommerce sector can hit Rs 2,11,005 crores by the end of December 2016 from Rs 1,25,732 crores last year, thus indicating a CAGR growth of around 30 percent. These reports highlighted that eCommerce sector though new in block is not just creating quite an impact on the overall growth output of the economy but it is also the star sector for employment among the job seekers.

Being in a cusp of digital progression with positive indicators in the economy, eCommerce industry seems to be a clear winner among the job seekers. But, is it the case when we compare the statistics with the ground realities of this booming sector. The escalating prospects and ever increasing online consumer base propels the layman to infer it to be a profitable venture. But, in reality it has a very different story to tell. The FY15 saw an overall loss for big online retailers like Flipkart, Snapdeal, Amazon, among many others despite competitive discounts and offers. The recent move of demonetization by the government has made the situation worse as it has pulled down the sector even further. The cash crunch among the consumers have bought down the overall order volumes to a subsequent low as 70% of the orders were through cash on delivery payment platforms. The sluggish growth of these firms is posed to create a peril for the job seekers and as well the people employed. The bid to create a profitable venture by the investors of the firms would eventually make them take some hard decisions regarding their operations which would directly be linked to the hiring activities of these firms.

In recent times, two big players in retail e-commerce market Myntra and Jabong have been merged with Flipkart, who posed to be tough competitors in the past. Though it has been able to salvage the fortune of the companies, can it be said so for the employees of these firms as well? With the merger of two giant online retailers, is it also the merger of employees? If it is not the case then what is the future of the employees of the merged firms and what are the prospects of the current job seekers. The backbone of online retail e-commerce is their delivery and logistic systems, as faster deliveries of orders accounts to higher rate of loyal customers which in turns helps in enhancement of company profits. These services are more favorable towards unskilled or basic skilled individuals than high skilled ones. Therefore, even if the merged companies want to retain the employees of the merged companies its more likely to be the individuals employed in these services than those engaged in managerial or technical domain. As in business perspective, delivery and logistic personnel would put less financial burden on them compared to the high skilled workers therefore opening a gate of opportunities for semi- skilled workers than professionals. It can be observed by the recent move of Flipkart which has ramped up its logistics services by partnering with ‘Dabbawalas’ of Mumbai to ensure last mile faster delivery to its consumers.

Digitization transitions in India has unquestionably created a wave of optimism but the question is whether it can be scalable in reality. Creation of actual job positions for the current and future job seekers is still quite uncertain. The ever increasing surge of unemployed degree holders in India depicts a contrasting image to the sanguine statistical data of future growth and employment opportunities. There is an eminent possibility that due to crunch in employment opportunities, professionals may take up roles which require semi-skilled workers thus creating a massive disequilibrium in the economy. The equivocal state of eCommerce sector compels us to ponder on its viability and feasibility measures in the near future and to get a reality check on its growth projections.