Need to strengthen e-commerce platform to reduce transaction costs: Commerce Ministry
Need to strengthen e-commerce platform to reduce transaction costs: Commerce Ministry

NEW DELHI: The Commerce Ministry on Wednesday sought specific suggestions from the industry to strengthen e-commerce platform for enhancing trade and reducing transaction cost.

"Let us come out with very specific agenda as what needs to be done by various ministries...we have a huge potential but we have lot of gaps on legal side, infrastructure side and on the taxation side. We need to address these," Joint Secretary in the Commerce Ministry Sudhanshu Pandey said.

He was speaking at a CII function on transaction cost and e-commerce here.

He said that movement of goods from one state to other in the country face several problems which lead to increase in transaction cost.

According to industry experts, the quantum of transaction cost is 7-10 per cent of the total value of Indian exports.

This amounts to a significant 415 billion.

The Ministry has announced several steps to reduce the cost which include 24x7 customs clearance facility on airports.

The official also said that increasing protectionist measures in some economies under the garb of 'technical barriers to trade' too is pushing transaction cost of traders.

These barriers are mainly related with procedures and processes.

As per estimates, the market size of e-commerce stands at $3-5 billion and are expected to increase to $80-100 billion by 2020.

E-commerce helps in marketing products by MSME sector which do not have the financial muscle to go in for big advertising blitz.

 
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Differences Between Store Retail and Non-Store Retail
Differences Between Store Retail and Non-Store Retail
 

In today's dynamic retail environment, understanding the nuances between store retail and non-store retail is crucial for entrepreneurs and business owners. These two retail models cater to different customer needs and preferences, shaping the way we think about shopping and commerce.

Store Retail: The Traditional Touchpoint

Store retail, often synonymous with brick-and-mortar stores, offers a tangible shopping experience. Customers value the sensory engagement – the ability to touch, feel, and try products. This model thrives on personal interaction and immediate gratification. A customer in Chennai shared, "I prefer store shopping for clothes, as I can try them on for the perfect fit." Indeed, a 2023 survey revealed that 65% of shoppers prefer buying certain items in-store due to these factors.

Moreover, store retail supports the local economy. Small businesses and retailers form the backbone of communities, offering personalized services. A study by the Retailers Association of India highlighted that small retail businesses contribute significantly to local employment, accounting for about 10% of the workforce.

Non-Store Retail: The Convenience Revolution

On the flip side, non-store retail, which includes online shopping, direct selling, and telemarketing, has transformed the retail landscape. The ease of shopping from anywhere at any time is its biggest allure. A Bengaluru-based entrepreneur mentioned, "Online shopping has been a game changer for my business, allowing me to reach customers nationwide."

Statistics reinforce this trend. In 2023, e-commerce in India saw a 30% growth, indicating a shift in consumer behavior. This model also offers wider selections and competitive pricing, driven by lower overhead costs.

Balancing Both Worlds

For businesses, the key is in balancing both models. A hybrid approach caters to diverse customer preferences. An innovative example is a Mumbai retailer who integrated QR codes in their physical store, enabling customers to scan and learn more about products online.

Comparative Overview of Store vs. Non-Store Retail

Here's a tabular comparison highlighting key differences:

Aspect Store Retail Non-Store Retail
Customer Experience Sensory engagement, personal interaction, immediate gratification. Shopping from anywhere, anytime convenience.
Economic Contribution Contributes to local employment (approx. 10% of workforce in India). Rapid growth (30% increase in e-commerce in India, 2023).
Product Interaction Ability to touch, feel, and try products. Often relies on product descriptions and reviews.
Customer Preference Preferred for certain items (65% of shoppers for clothes, as per 2023 survey). Increasingly popular for a wide range of products.
Business Model Requires physical space, higher overhead costs. Lower overhead costs, wider reach.
Local Impact Supports local economy, community-centric. Less direct local economic impact, but broader market access.
Adaptation Innovating with technology integration (e.g., in-store QR codes). Continuously evolving platforms and delivery methods.

In summary, the retail terrain is characterized by the unique yet harmonious functions of store-based and non-store retailing. Store retail, celebrated for its tactile experience and instant satisfaction, remains a favored choice for many shoppers, especially for items where physical interaction is key. Conversely, non-store retail has transformed the way we shop through its unparalleled ease and extensive scope, propelled by the expansion of digital platforms.

 

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