e-commerce is bridging the digital divide – with some help from India Post
Think e-commerce and the first thing that comes to mind is convenience,
discounts, and of course a number of websites. But what escapes the mind
is the crucial service that this kind of platform is providing to the
nation. It serves as a social bridge connecting rural India with urban
India. Like a thread, it ties the digital divide in the country.
Vineet Pandey, chief general manager, business development, department
of posts, explains this phenomenon. “The Digital India initiative and
internet boom have bridged the digital divide. Riding on this wave,
e-commerce is bridging the rural-urban divide. Availability of products
at the doorstep is tremendously changing the landscape, especially in
cases of women and childcare products.” Products which were earlier
restricted to only metro cities have now become easily available for the
rural masses.
Sharing a small incident, he recalls, “Our minister [communications and
IT minister Ravi Shankar Prasad] once visited a branch office in Hapur. A
girl was waiting for a parcel delivery there. The minister asked, ‘What
have you ordered?’ The girl replied, jewellery.” This shows the change
in the mindset of people in the tier II and III cities. The suspicion
that online products could be fake and unreliable is slowly fading. “A
girl from the hinterlands is now ready to trust that the jewellery which
she has ordered is authentic,” adds Pandey.
Acting as a social connector, the e-commerce boom in India is growing at
a faster pace in the tier II and III cities than the urban and metro
areas. There is a huge demand for clothes, mobile phones, electronic
gadgets, and competitive books from these areas. As per PHD Chamber of
Commerce and Industry, roughly 50-60 percent of the total e-commerce
business comes from these areas.
In fact, in 2016, the gross value of Indian e-commerce business crossed
'4,000 crore till March. And roughly 17 percent of the growth was due to
the involvement of the middle class.
Aruna Sharma, secretary, department of electronics and information
technology (DeitY), feels that today various government programmes are
also helping in promoting rural e-commerce. “As infrastructure is being
built under Digital India – BharatNet, Aadhaar, common service centres
(CSCs),” she says, adding that it is being envisaged to develop them for
promoting rural e-commerce.
But what are the factors that are contributing to the growth of this industry in the hinterlands?
India Post shows the way
It is one of the key players responsible for establishing e-commerce in
rural areas. Currently partnering with over 900 e-commerce players,
India Post is one of the most successful e-commerce facilitators in the
country.
The institution’s reach in the remotest corners of India has helped it
become a brand name, especially in rural e-commerce. It has access to
more than 19,000 pincode areas across the country, which also serves as
delivery points. Each pincode is connected to a post office, which is
known as the last-mile departmental delivery post office. This is
further mapped to a rural post office, also known as branch office or
gramin dak sewa.
“This branch office can be a single-handed branch where the postmaster
is both the carrier and the delivery man. So every place is mapped and
there is no location where a product cannot reach,” explains Pandey.
With an average of 40,000 parcels being circulated on a monthly basis,
the department transports various goods and packages across the country.
“In our last independent survey, conducted a few years ago, India Post
was first in terms of handling parcel traffic and second in terms of
parcel volume/quantity,” says Pandey.
He points out that the USP of the department is its reach or
accessibility to the remote areas. “This facilitates both the department
and the government in reaching out to several far-off areas including
some in Karnataka and Kerala,” adds Pandey.
India Post has also partnered with many private e-commerce players,
especially for providing logistic services. Amazon is one of them. Samir
Kumar, VP, category management, Amazon India, says, “We have partnered
with India Post. It is one of the prime carriers that Amazon India uses
as a delivery channel. Through India Post’s extensive network, we are
able to service all the serviceable pincodes through 1,40,000 post
offices across all 35 states and union territories in India.”
Involving rural folk
Along with the postal department, the government has also pushed the
growth of e-commerce by using common service centres (CSCs) as delivery
points. Dinesh Tyagi, CEO, CSC-SPV, says that through the CSCs, the
government is including village level entrepreneurs (VLEs) in e-commerce
in several ways. In the first method, the VLE can buy the product from
any e-commerce site either for himself or facilitate the purchase for
others. The order is then integrated with the CSC’s system and the goods
are delivered.
In the second method, a VLE can set up his own e-commerce platform to
help the local population. This kind of platform will facilitate sale
and purchase of local goods in local areas only. “This kind of model can
be seen in Andhra Pradesh,” says Tyagi.
CSCs are also involved with many government e-commerce websites like
ekisan.com and pumpkart.com. Besides this, adds Tyagi, there is an
attempt, on a pilot basis, to source local goods and supply them all
over the country through e-commerce websites.
Explaining how CSCs are involved in multiple stages of the e-commerce
process, Kamal Kakkar, a consultant with CSC-SPV, says, “We are taking
orders and getting the goods delivered at various CSCs as their location
is known via GPS. The CSCs then deliver the goods to customers as they
are in the same locality.” In this way a CSC acts like a delivery point
and delivery person.
Steps are also being taken to integrate various e-commerce companies
with the CSCs. This helps companies like Amazon in achieving their
last-mile delivery goals. The CSCs not only act as the last-mile
delivery centres for these companies but also provide warehouse
facilities, whereby the companies can store their goods at the centre
for future delivery.
The CSCs also organise VLE bazaars that helps many unknown artisans to
sell their handicrafts. “We are engaging VLEs as agents to aggregate
these artisans to come to this platform. We are making them comfortable
so that they can come and sell through the CSC network,” explains Tyagi.
“We have done several workshops with Snapdeal for aggregating these
artisans. We have signed an agreement with Flipkart for seller
aggregation and assisted selling through this platform. We have tied up
with ShopClues to sell their products across India through CSCs,” adds
Tyagi.
CSCs in return receive several benefits and incentives for carrying out
their work. “For every product they sell and buy from ShopClues, they
get two percent,” informs Kakkar.
A system of CSC wallet is also in place to help the customers who are
not able to pay online. Here the government can take cash from the
customers who cannot pay online and top up their CSC wallets.
Though on one hand CSCs have contributed a lot to the growth of
e-commerce, they themselves have reaped benefits too. Dr Ajay Kumar,
additional secretary, DeitY, says, “I am aware that a lot of CSCs are
doing handsome business through e-commerce.” Giving examples of a few
CSCs, he says, “Some are earning a monthly revenue of '50,000 through
e-commerce.”
