Online Biz Overpowering Trader's Market
As we are getting comfortable at our homes, we have got accustomed to getting everything at our doorstep. Nevertheless, now many prefer to complete even their shopping in their comfort zone. As a result, the online business has been spreading its wings which indeed is shrinking the traditional trading market. However, the prolonged lockdown has also fuelled the burning fire by curbing the market access to the general public and restricting the movement this has struck the trade market.
According to the research firm Statista, U.S. retail e-commerce sales are estimated to grow to $599 billion in 2024, up 64 percent from $365 billion in 2019. The U.S. share of global retail e-sales is projected to drop from 10 percent to 9 percent over the same time. However, in 2018, about 1.8 billion people across the globe have purchased goods online. Hinting this, the McKinsey Global Institute foresees that e-commerce accounts for 12 percent of global trade of bodily goods, both business-to-consumer (B2C or retail) as well as business-to-business (B2B) sales. Although, certain foreign trade policies, infrastructure inconsistencies, and the lack of globally enforceable rules hypothetically affect further e-commerce growth.
Over the period of time, the online business has given trading a run for the money. The growing business competition between the online shopping website and the retailers are leaving the traders to grasp. The lowering demand, dip in their saving especially during the critical situation, the traditional retailer is having a tough time in meeting the business expenses such as paying rest, staff salary, their medical emergency have been posing a major challenge for the traders. This has even forced the traders to minimize their staff numbers. Likewise, several other reasons are hindering the traders to keep their business going.
Ashok Randhawa, president of the Sarojini Nagar Mini Market Traders’ Association, states, “My wife had to be given Remdesivir injection and was on oxygen support for days. We ended up spending over 5 lakh procuring medicines from the black market; this is the story of several households that have been infected and ended up exhausting their savings on treatment. How will we pay our staff if shops are not allowed to operate? We want the government to allow us to open shops so that we earn something.”
Other traders across markets including at Connaught Place, Lajpat Nagar, South Extension and Sadar Bazar. Paramjeet Singh Pamma, the vice-chairperson of the Federation of Sadar Bazar Traders’ Association, says that they have to pay electricity bills and rent even when their shops are closed.
Sanjeev Madan, president of the Lajpat Nagar Market Association, adds, “The entire supply chain goes for a toss. If someone has taken a loan, he would become defaulter. He will end up stopping payment to vendors and staff, which will affect the business of factories. The online market is giving us a tough time and if we are not allowed to operate, they will further damage us as we are losing on our capital and savings.”
Considering this, Delhi Chief Minister Arvind Kejriwal has announced that the national capital has registered around 900 new Covid cases in just 24 hours and that if new infections continue to drop, more activities could be allowed to in and across the city. Addressing the trader’s request, he adds, “I can understand their difficulty but they should be patient and not rush. We also want their markets and shops to open up. As and when the situation comes under control, we will open up everything.”
Brighter Side of eCommerce
Although eCommerce is impacting the traders it is also convenient such as prices, productivity and more. An amalgamation of technological and market has resulted in compelled companies to examine and rediscover their supply chain strategies. To remain competitive, firms have explored for greater coordination and association among supply chain partners to bring out the inefficiencies that might survive within-firm transactions. Many of the transactions could be done externally, through electronic markets. The Internet and its applications have also served to improve the process to rise efficiencies in supply chain management.
Also, ICTs permit firms to recognise the market for the inputs they need in production and substantially cut down the cost of gathering and processing information about the prices and input characteristics of different goods and services. Furthermore, information and communication technologies make it easier to integrate and control remote operations without incurring prohibitive costs. Better ICTs enable optimized operations to be established in low-cost domestic locations and countries where comparative advantage is present for the outsourced task. E-commerce thus facilitates the efforts of companies to separate and spin out every conceivable activity in the production process to entities outside the firm. The available empirical evidence on price is mixed. Some of the first studies found that prices of goods sold through the Internet were on average higher than their equivalent purchased through traditional retailers. A more recent study, however, found prices for books and CDs on average to be about 10 per cent lower on the Internet compared with traditional retailers in the United States. Evidence on-demand compassion to rates is also mixed, with some work suggesting a low and others a high price elasticity of demand.
Evidence from countries where the use of information and communication technologies is widespread suggests substantial productivity improvements. In an analysis of the contribution of information and communications technology to economic growth in nine OECD countries, over the past two decades, ICTs contributed between 0.2 and 0.5 percent per year to economic growth. During the second half of the 1990s, this contribution rose to 0.3 to 0.9 percent per year. Effects were the largest in the United States, post that comes Australia, Finland and Canada. Another study suggests that the rise of B2B e-commerce will in the long run increase the level of GDP by five per cent. In addition, it has been debated that Internet-related technologies could boost the speed of financial transactions, which inflates the issue as to how interest rates should be set and whether the short end of interest setting demands to become shorter that is time units smaller than a day. However, the growing technology does result in inflation but eases our daily routine resulting in increased productivity.
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