Retail
Amazon fears Khandelwal
Can he save the small businesses from e-commerce giants
Deep discounts by e-commerce firms have harmed brick and mortar small businesses of India. Small businesses can not match up the offers by the e-commerce retailers. Though, there is an ongoing anti-trust case against Flipkart and Amazon, small businesses see government siding with big businesses.
Praveen Khandelwal is fighting for 8 crore small businesses of India. He leads Confederation of All India Traders (CAIT). E-commerce business model is gradually eating B2C retail from clothing to grocery to stationary to sporting goods to books. In no time it will be after B2B retail such as hardware, paints, furniture etc. Sales of Amazon and Flipkart have doubled after the pandemic. On the other hand small businesses are facing closure and losses. Can Khandelwal’s activism save the businesses from the onslaught?
Nilesh Christopher wrote for Rest of World: For cellphone sellers like Arvinder Khurana, the shift was brutal. Before e-commerce, Khurana said, “I wouldn’t even find time to eat food, we were always standing and selling.” But after 2015, when Amazon and Flipkart began offering exclusive smartphone models online and pairing them with deep discounts, retailers like Khurana couldn’t compete. “I noticed that the kids of my top customers were coming to the shop, but not buying phones,” said Khurana. “They would check the phone in my store and order online.” He said 25 of the most low-cost smartphones weren’t even made available by brands to stores like his.
CAIT has launched Bharat E Market for micro and small businesses. It’s an e-commerce platform, which promises to help small brick and mortar stores. It aims to help 1 million traders in the first year.
Small businesses do not suffer due to lack of e-commerce access. They lack access to formal finance. Observer Research Foundation has published a paper how a credit guarantee scheme can help micro, small and medium enterprises in India. It outlines that formal finance depends on financial reporting and collaterals, which small businesses lack. As soon as the government launched the scheme, about 12 lakh businesses have availed the collateral free loans. The scheme offers a loan amount upto INR 2cr. It claims to have helped 18 lakh businesses start their entrepreneurial journey.
Small businesses can compete with the big chains and e-commerce if they have the access to similar infrastructure, legal safeguards and access to formal finance.
