Ad hoc policies hindered e-retail operations during COVID: Esya Centre

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Esya Centre, a New Delhi-based think-tank that conducts research on technology and innovation, has studied the impact of the Covid-19 pandemic and subsequent lockdowns, on e-retail in India.

Its latest report titled “E-Retail, Consumer Demand And The Road To Recovery: An Evaluation Of Challenges Linked To Covid-19 And The Path Forward” suggests that while all segments of the economy suffered because of the pandemic, the retail sector was particularly hard hit. Consequently, e-retail became a mainstay for small sellers.

The Centre conducted a survey of over 2000 small sellers who retail goods online. The survey found that most such entities prefer the online channel, but faced operational roadblocks during nationwide and state-level lockdowns.

Ad hoc policy design and inconsistent implementation hindered operations. For instance the definition of ‘essential goods’ was left unclear. There was also variance in policy prescriptions for brick-n-mortar retail and e-retail.

The report suggests that e-retail is a channel that must be encouraged for households that have the willingness and capacity to make purchases at this time. This can be done by helping small sellers to adapt and use technology.

Actions by state governments will play a critical role in determining how well such retailers are able to recover. A rapid recovery will require cohesion and collaboration between governments at centre and state. With this in mind a multi-step recovery process is suggested in the report.

The report recommends that governments at various levels engage with different stakeholders to understand their concerns. Authorities should frame rules on the basis of holistic feedback and the principles of non-discrimination and non-arbitrariness. This will facilitate a level playing field that allows retail market participants to leverage their respective strengths.

The report also suggests that a future governance framework for e-retail, or e-commerce more broadly, can take inspiration from the sectoral development bodies in Malaysia and Singapore, which have enabled local businesses to scale and compete globally.

Please contact the Esya Centre ([email protected]) to request for a copy of this report.

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