Piyush Goyal says growth of e-commerce in India ‘matter of concern: ‘Nothing to be proud of’

NEW DELHI : Union Minister of Commerce & Industry, Shri Piyush Goyal, expressed his concerns about the rapid growth of E-commerce and online shopping in India, warning that it could transform the country into ‘a nation of couch potatoes.’

“We will land up becoming a country of couch potatoes, watching OTT and having food at home every day,” said Piyush Goyal. He also said the growth of e-commerce should be seen as a “matter of concern” rather than a source of pride.

Speaking at an event on Wednesday, where a report on the ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India’ was released, Goyal highlighted the potential social disruptions that could arise from the booming e-commerce sector.

“Are we going to cause huge, social disruption with this massive growth of e-commerce? I don’t see it as a matter of pride that half our market may become part of the e-commerce network 10 years from now; it is a matter of concern,” Goyal said.

He mentioned the need for a well-considered approach to the role of e-commerce in India and acknowledged that while e-commerce has a place in the economy, its impact should be carefully managed.

“E-commerce has a role, but we have to think carefully about what that role is and how it can be more organised,” Goyal said.

The Union Minister also expressed concerns about the pricing strategies adopted by some e-commerce firms, asking, “Is predatory pricing policy good for the country?”

Goyal pointed out that e-commerce is particularly affecting small retailers who rely on high-value, high-margin products to survive. He warned that the rapid growth of e-commerce could eat into the business of these small retailers, potentially driving them out of the market.

While acknowledging that e-commerce is here to stay, Goyal highlighted the importance of assessing its broader impact on the economy.

He said hat only a small portion of the population currently uses online platforms to buy essentials like food and groceries, suggesting that the sector does not dominate every aspect of retail.

Goyal’s concerns extend to the 100 million small retailers across India who serve the market. He highlighted the rapid growth rate of 27% per year in the e-commerce sector, warning that this could lead to significant disruptions for these small businesses. In this context, he expressed his support for the offline retail sector.

The minister also questioned the excitement surrounding Amazon’s announcement of a billion-dollar investment in India. He urged a closer examination of what such investments actually mean for the Indian economy.

When Amazon says we are going to invest a billion dollars in India and we celebrate, we forget the underlying story that this billion dollars is not coming for any great service or investment to support the Indian economy,” he said.

Goyal pointed out that Amazon reported a billion-dollar loss on its balance sheet that year, suggesting that such losses might be linked to predatory pricing practices.

He questioned the sustainability of such business models, asking, “If you make Rs 6,000 crore loss a year, doesn’t it sound like predatory pricing to you? They are, after all, an e-commerce platform, and they are not legally allowed to do B2C. However, the reality is all of you buy on these platforms. How are they doing it? Should it not be a matter of concern for us?”

Goyal also expressed concern over the decline of small mobile stores, which have been out competed by larger retailers.

“How many mobile stores do you see now on the corner? And how many were there 10 years ago? Where are those mobile stores? Will only Apple or the large retail sell mobile phones and their accessories?” he asked, highlighting the challenges faced by small retailers in the current market environment.