New-age digital commerce

Context: Addressing the challenges in new-age digital commerce

Growth of Digital Commerce

• India’s consumer behaviour has experienced radical transformation at the most fundamental levels.
• The rise in smartphone use fuelled by affordable data plans has catalysed an online revolution in the country.
• The novel coronavirus pandemic has further accelerated the process of digital inclusion, and it is now not only routine to transact online and have food, personal care items delivered at the one’s doorstep, but it is also common to learn online, have medical consultations online, and even resolve disputes online.
• These realisations have given India the opportunity to disrupt the status quo with its innovative abilities.
• Systems such as the Unique Identification Authority of India (UIDAI) and Aadhaar, the Unified Payments Interface (UPI) and the Ayushman Bharat Digital Mission have reengineered markets.

Left out

• Despite the rapid advancement of digital platforms on the one hand and the pervasiveness of the Internet-enabled phone on the other, small enterprises such as local kirana stores have not gained from this.
• Online purchases from “near and now” inventory from the local store remain in a digital vacuum.
• This is because, to sell on numerous platforms, sellers must maintain a separate infrastructure, which only adds costs and limits participation.
• The distinct terms and conditions of each platform further limit the sellers’ flexibility.
• Consequently, small and medium-sized businesses have lost their freedom to choose and participate in the country’s e-commerce system at their will and on their terms.
• Alarmingly, centralising digital commerce transactions on a single platform creates a single point of failure.

Wider choice and access

• The Department for Promotion of Industry and Internal Trade (DPIIT) of the Government of India established the Open Network for Digital Commerce (ONDC) to level the playing field by developing open e-commerce and enabling access to small businesses and dealers.
• The ONDC network makes it possible for products and services from all participating e-commerce platforms to be displayed in search results across all network apps.
• This achieves the dual objective of wider choice for consumers on the one hand and access to a wider consumer base for sellers on the other.
• The ONDC began its pilot in five cities in April 2022, i.e., New Delhi, Bengaluru, Coimbatore, Bhopal and Shillong. Currently, the pilot has expanded to 18 cities, and there are immediate plans to add more cities.
• With India’s e-commerce industry set to reach $200 billion by 2027, this shift from a platform-centric paradigm to democratisation of the nation’s online market will catalyse the inclusion of millions of small business owners and kirana businesses.

Better outcomes

• Disputes will be the obvious by-product of this e-commerce revolution. Therefore, it is imperative to support this initiative with a modern-day, cost-effective, timely and high-speed dispute resolution system.
• The framework must adequately and efficiently cater to facets such as participants residing or operating in different geographic regions and the mass prevalence of low-value online transactions.
• Online Dispute Resolution, or ODR as it is popularly called has the propensity to work alongside the incumbent setup and deliver quick, affordable and enforceable outcomes.
• The ODR can be tailormade for the specific use case keeping the participants in mind.
• ODR can also involve advanced automation, the use of technologies such as artificial intelligence and machine learning to enable resolutions at the same time as it would take to initiate a transaction over the network.
• Thus ODR can not only digitise the entire value chain but can also facilitate an enhanced user experience.
• Many e-commerce companies have turned to the ODR with the realisation that in order to maximise transactions it is important to ensure a positive dispute resolution experience.

There is growing adoption

• The ODR is no more a distant dream for India as well.
• Governments, regulators and private enterprises have been adopting and encouraging its use.
• For instance, the National Payments Corporation of India (NPCI) has mandated platforms in the UPI ecosystem to adopt the ODR for complaints and grievances connected to failed transactions.

Significance

• The ODR will help mitigate litigation risk and provide valuable insights into problems faced by consumers.
• The courts and consumer forums can do away with matters which do not warrant their intervention, thus easing the judicial logjam.
• Consumers are provided with another choice for effective redress of their grievances, thereby building trust, confidence and brand loyalty.

Source: The Hindu

Previous Year Question

Q.1) With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct? (2022)

1. They can sell their own goods in addition to offering their platforms as market-places.
2. The degree to which they can own big sellers on their platforms is limited.

Select the correct answer using the code given below:

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2