Online comprises 1.6% of retail sales in India: World Bank

25 Dec '19
2 min read
Pic: Shutterstock
Pic: Shutterstock

Online sales in India accounted for 1.6 per cent of total retail sales, with intra-regional trade in South Asia remaining low, according to a recent report by the World Bank, which said while e-commerce has grown substantially in recent years, it is still very small in the region. Online sales is over 15 per cent for China and around 14 per cent globally.

Indian firms, which tend to be more digitised and heavily concentrated in service sectors, tended to highlight regulatory issues like tax rules, legal liability, laws and data piracy challenges as the top challenges to e-commerce, the report, titled , 'Unleashing E-commerce for South Asian Integration', said.

A survey of more than 2,200 firms showed that most of the cross border e-commerce was conducted with extra-regional partners like China, the United Kingdom and the United States, the bank said.

Referring to various studies, it said mobile phones, electronic and computer accessories, clothing, footwear, fashion accessories and consumer durables were most traded in India. The bank said that while Indians and Pakistanis transact online significantly, the likes of Bangladesh and Nepal fare worse than many African countries on most e-commerce indicators.

In addition, the pervasive lack of trust between the South Asian countries hurts trade.

Firm choice is distorted by existing regulations in South Asia. For example, in countries such as India and Sri Lanka, foreign multi-brand retailers cannot have their own inventory, and international e-commerce giants must only operate as pure marketplaces. Cross-border e-commerce faces many hurdles, according to the study.

"This may have consequences for market access for small firms with limited digital and logistical skills because it reduces the options available to these small retailers and producers," it added.

Fibre2Fashion News Desk (DS)

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