'Online Commerce Will Compliment Physical Retail Stores'

Recently, Flipkart, India's largest e-tailer, got a $1 billion funding, which took its valuation to a whopping $7 billion - a news that made global headlines. Soon after, the U.S.-based Amazon said it was investing $2 billion in India's e-commerce space.

All these are bound to have an effect, giving e-commerce a larger share of the consumer goods market. According to a joint report of KPMG and Internet and Mobile Association of India, e-commerce industry is expected to contribute four percent to the GDP by 2020.

The report also said favourable regulatory environment will be the key to unleash the potential of e-commerce, even as the implementation and roll-out of goods and services tax would simplify the tax and jurisdictional laws for e-commerce.

This apart, an inventory based consumer e-Commerce model, where e-retailers also stock merchandise and enter into exclusive tie-ups for distribution, is estimated to create some one million direct and another 0.5 million indirect jobs by 2020.

There are also demands to allow foreign direct investment in inventory-based e-commerce. But the government is not yet taking a call on this. Once that happens, analysts like Nath believe it will bring more capital and improve e-tailing infrastructure.

Again, this will prove good news for the overall growth of India's trade industry, the fifth largest globally, forecast to grow from $490 billion now to $790 billion by 2017. The verdict: The two formats in question, physical stores or e-tailing, will co-exist.
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