What’s the news: Consumers and businesses in Himachal Pradesh may soon avail a Shopify-like service for its e-commerce sector as the union government floats a unique tender to set up an online system that provides no-code websites and an e-commerce shop builder.
Essentially, this will help people create their own websites and promote their businesses to a bigger market. In this way, the online system will work like the Canadian multinational e-commerce company.
This tender also comes in the wake of the Union government’s enthusiastic approach towards an Open Network for Digital Commerce (ONDC). It is worth considering the merits of the state government investing in such a system when the Centre is already pushing to connect buyers, suppliers, payment, and logistics providers through open-source specifications and protocols.
Why it matters: Previously, Indian entities like Bharti Airtel or Getitbazar had to tie up with foreign companies like Shopify to create an e-commerce platform for Indian micro-small-to-medium enterprises (MSMEs). This tender will provide an Indian alternative to such a platform, albeit bringing in more government influence on MSMEs as well. At the same time, encouraging local businesses to shift to such a system may pressure MSMEs into competing against the big players in the e-commerce sector.
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How does the tender appeal to MSMEs?
No Hidden or Additional Costs: Possibly the biggest attraction for local users is that this government-backed system does not require them to pay any additional or hidden costs for its use. This is unlike Airtel customers who had to pay ₹ 818 per month aside from other monthly plans of Shopify India back when the service was launched in 2013. However, with this new platform, the users will be able to upgrade their e-commerce site and subscribe to a larger plan with more products, in case they have more than 50 products to showcase on their site.
Tender offers no-coding websites: As per the tender, users will not be required to write any code or need the help of any programmer or developer. According to Webflow, such a web development allows non-programmers and programmers to create software using a graphical user interface, instead of writing code. This will be helpful for MSMEs that may not have the technological inventory required for setting up a coded website. Users can personalise their websites with customised themes that will be provided by the platform.
Linking social media profiles: The system will also link pre-existing social media profiles of businesses to the e-commerce stores since a lot of local businesses garner their audience from platforms like Instagram or Facebook. Moreover, the website will have built-in analytics tool for users to track and analyse products and sales.
The tender also mentions that the online system is optional. This means that users can also migrate their existing site into the system or move their website out of this system at their convenience. Users will be provided with training modules and videos for learning website development and using this system.
Integrated payment options and shipping partners: As per the tender, the online system will have integrated payment gateways and shipping partner services to deliver goods to their customers. Similarly, the system will also provide order status management which will enable users to manage customer orders with the in-built status management tool that gives real-time order status for better customer service.
The platform will also be available as a mobile app using which, users can keep track of orders, payments, and products. Similarly, they can add new products and manage down-line inventory easily. Customers will use the same app to browse through products.
Very little mentioned about data security
Aside from the no-coding aspect, the tender states that citizens and users should be able to map their own domain to the e-commerce shop builder and secure all website transactions on their own brand. However, the EOI does not elaborate as to how this data will be secured. There is no mention or reference to a privacy or data protection law, nor does the tender talk about the IT Act 2000 or the Competition Bill. This may be a cause for concern since the platform aims to provide an online system for MSMEs in a specific state.
Instead, it talks about how businesses will have a scope for personalising their sites and users can embed Google Analytics to their individual platforms to track website performance and traffic from various channels. Earlier in June, The Verge talked about similar business related features of Google like the Rich Communication Services’ (RCS) Business Messaging feature. It was banned in India after users complained that the service was being used to deliver unwanted ads pushing credit cards and gambling apps, among other things.
Will the online system really benefit SMEs?
The Tribune in July reported that the state’s self-help groups (SHGs) of urban women recorded the highest online sale via e-commerce portals like Amazon and Flipkart among SHGs across India over the past year. The Department of Urban Development told the newspaper that the SHGs conducted business worth ₹ 4.40 lakh.
Considering this, the idea of creating an independent online portal for the local businesses appears like a good idea at first. However, a Parliamentary Standing Committee on Commerce while weighing on the ONDC concept said in a report that “the local business will find it extremely challenging to compete with the discounts, sales and other lucrative offers, being offered by prominent e-commerce players which may result in local business being squeezed out of the network in the long run.”
Further, it pointed out that the success of the ONDC is contingent upon factors, “such as the successful onboarding of the existing digital commerce apps and platforms, the compatibility and interoperability of the existing platforms/applications of the buyers and seller and the technical capability of small and medium enterprises to be onboarded on the digital network. However, the strategy paper [on ONDC] is silent on these issues and does not lay out a road map/strategy for addressing these issues.” For this reason, the Committee recommended that the government ensure a level playing field between mall businesses and e-commerce giants.
On August 30, Piyush Goyal, Union Minister of Commerce and Industry, directed the Department for Promotion of Industry and Internal Trade (DPIIT) to work with all state governments to create awareness about the utility of ONDC and devise programs with state governments to encourage small traders, artisans, handicraftsmen, farmers, MSMEs to take full advantage of this open network.
“ONDC must work with the startup ecosystem to encourage and assist more entrepreneurs from across the country to develop e-commerce apps and assist their local traders, artisans, handicraftsmen, farmers, MSMEs, etc. All government supported Incubators and other institutions and mechanisms working for innovation and entrepreneurship should be leveraged,” said Goyal as per a department press release.
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