E-com can generate 12 mn jobs in India

28 Jul '16

3 min read

E-commerce has the potential to add 12 million of the 80 million new jobs that India needs over the next decade, according to a HSBC Global Research report, India: More jobs per click - The employment potential of e-commerce.

Nearly three-fourths of the new jobs in the e-commerce sector are expected to be in broad supply chain activities -- logistics, warehousing and courier – while a little less than one third, that is, 30% would be in customer care, information technology and management, it said.

However, the country may still fall short by 24 million or 30% in achieving the required 80 million job target, the report cautioned.

Half of the expected shortfall could be mitigated, if enabling factors work to the advantage of the e-commerce ecosystem in the country, it said.

The e-commerce business in India is already showing the potential to support the projected growth for new job opportunities. India, according to this report, has 330 million internet subscribers, almost all of which, or around 94%, are wireless. This means mobile phone-driven e-commerce activities will be a major force for growth in the near future.

At present, there are one billion mobile phone subscribers covering 75% of the current population, one billion biometric identities (Aadhaar cards), and 220 million new bank accounts, the report noted.

The report counts on the country's demographics, particularly the fact that the generation born after 1990, or the start of the internet age, accounts for one fourth of the population now and is expected to swell to 45% by 2025.

There is also immense potential in the retail sector, which could be brought under the organised retail framework, creating sufficient headroom for growth in e-commerce. At present, organised retail accounts for only 8% of the overall retail pie in India against China's 25% and 85% in the United States.

E-commerce as an element of overall consumption in India is still less than 2% of the total figure, compared to14% in China, indicating a magnitude of catching up India needs to do to realise its job potential.

The report recommended setting up of digital market places in rural areas, which could further improve job opportunities in businesses related to e-commerce.

There are working models that India can adopt. For instance, Taobao villages in China created by internet giant Alibaba. From 20 such villages in 2013, they have grown to 780 by 2015. These digital villages are spread over 17 provinces and cover more than 200,000 active online shops, the report said.

“In India, the potential for e-commerce in rural areas is promising given similar infrastructure inadequacies as in China. The market potential is sizeable as well. For example, more than 800 million people live in 640 villages (in India),” it said.

The biggest challenge for this rural transformation, however, is Internet penetration in the villages. (SH)