APSC Mains Important Questions And Answers : Topic Wise APSC Mains Questions Answers

E-Commerce Sector in India – FDI Policy, E-commerce Industry, Causes, Growth & Challenges for APSC Main Exam

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APSC Mains Model Answers

Topic Wise APSC Mains Questions Answers

In this article we have provided you Topic Wise APSC Mains Questions Answers. So, read all these important Model Answers for APSC Mains exam preparation. These APSC Mains Model answers are extremely important and should be a part of your preparation.

APSC Mains Important Questions and Answers

The E- Commerce Sector in India is an very important topic for APSC Main exam. Therefore, aspirants are advised to read this most important APSC Mains question & answer on E- Commerce Sector in India in order to answer the questions :

E-Commerce Sector in India – FDI Policy, E-commerce Industry, Causes, Growth & Challenges for APSC Main Exam

E-Commerce is defined as the buying and selling of goods and services including digital products over digital and electronic networks. Electronic commerce (E-commerce) draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.

E-Commerce in India ::

The Indian government introduced a national e-commerce policy that aims to create a favorable environment for the development of the sector and drive exports. The e-commerce policy was first proposed in 2018 and in 2019, a draft of the e-commerce policy was released. The national e-commerce policy aims to establish a regulatory framework that facilitates ease of doing business in the sector. 

By 2030, India’s e-commerce export potential is estimated to range between 200 billion USD to 300 billion USD annually. With global cross-border e-commerce exports projected to reach 2 trillion USD by 2025, India aims to capitalize on this growth opportunity.

There are typically two patterns in which e-commerce works in India:

1. Multi-product E-Commerce – The portals which sell multiple products on the same website or application are Multi-product E-Commerce companies. This includes Amazon, Flipkart, Snapdeal, where garments, furniture, books, stationery, etc. are all available at a single platform

2. Single Product E-Commerce – Under this, the companies which sell only a single type of product online are called Single-Product E-commerce companies. This includes portals like Makemytrip which enables all kinds of tourism-related services, similarly specific e-commerce companies for eyewear, furniture, gadgets, automobiles, etc. 

FDI Policy in India for E-commerce ::

The e-commerce sector in India is classified into two groups based on FDI policy:

Marketplace Model –

E-commerce entity acts as a facilitator between buyers and sellers on a digital platform.

Multiple sellers interact with buyers and sell goods.

Marketplace charges commission from sellers.

Examples: Naaptol, Shopclues

Inventory Model –

E-commerce entity owns inventory and sells directly to consumers.

Sellers are e-commerce companies sourcing from brands and sellers.

Example: Myntra

E-commerce industry in india ::

India’s E – Commerce Market :

Indian e-commerce is expected to grow at a CAGR of 27 per cent, almost three times the overall retail market and expected to surpass the US to become the 2nd largest E-commerce market in the world by 2034.

Nascent stage – India’s online retail market is just 3% of the total retail market and 25% of organized retail market.

Greater Adoption – India has the third largest online shopper base of 150 million (2021) after China and US and is expected to reach 350 million by 2026.   

Huge Employment potential – Directly & indirectly through backward linkages (MSME, Textile, Leather, Farmers, craftsmen etc) & forward linkages (Logistics, packaging, transport, storage, advertising etc.)

Sunrise sector – Fashion, grocery, general merchandise sector would capture nearly two-thirds of the Indian e-commerce market by 2027. 

Causes for the Growth of e-commerce sector in India ::

The e-commerce sector has suddenly seen a remarkable growth as there has been no change in the way Indian people shop for decades.

For ten years this sector has been dominated by two American companies. Not only do they hold about 75 percent of the online market share, but they are also the country’s two largest market players overall, given the lack of commercial chain monopolies in India.

Presently the e-commerce sector is being expanded by the Government of India to bring the economy of India, which is the fifth largest economy in the world, to the first position.

According to e-commerce companies, most of their growth comes from smaller Indian cities with a population of 20,000 to 100,000.

It has expanded due to large number of local and retail traders joining the e-commerce sector.

This has been made possible by the expansion of access to cheap internet.

Social media has also made people of all social strata aware of new things.

659 million people in India have smartphones and the cost of mobile internet data is among the lowest in the world. One billion Indians are expected to have access to the internet by 2025 and 33 per cent of them will be online shoppers.

India’s Tier-3 and Tier-4 cities are digitizing very fast. Internet has reached even in rural India and the pace of its penetration is very fast in other areas. Due to this, there has been a lot of change in the behavior of the customers or consumers there. Online shopping has become a necessity for them, not a luxury anymore.

The COVID pandemic also played an important role in this direction. This suddenly inspired new e-commerce ventures. The increasing trend of digital payment system further fueled this. A few years back India was predominantly a cash-based society, with credit and debit cards being used by only a small section of the society.

There has been a boom in the last few years due to the transition to the ‘Unified Payments Interface’ (UPI), in which millions of Indians have their bank accounts linked to apps and small items. Not only has this made a large section of the population more digitally literate, but it has also made it much easier to pay for goods purchased online. 

Challenges of the Indian e-commerce industry ::

High competition: There are different players in the same area of business leading to decrease in profitability due to reasons such as aggressive pricing strategies, heavy discounts and offers, free delivery, high commissions to affiliates and vendors during sale period to name a few. These firms are losing billions to attracting customers.

Poor logistic & supply chains: E-commerce companies need to maintain the stock to get the benefit of reach and the ability to stock more items than physical stores as these are their biggest differentiators. With this benefit also comes the challenge of robust supply chains and logistics networks, which are not comparable and developed to global standards in India.

Payments: While offering a wide variety of payment options, Cash on Delivery(CoD) option in India is the most prevalent as customers fear to share information online and do not trust the website for secure payments. Also, the return percentage of orders in CoD is much higher compared to online payments.

Trust of the customer: Due to the constraints of quality, colour and texture recognition especially in apparels and luxury products, the customers are not able to trust that what is shown will be delivered. 

Conclusion ::

E-commerce in India is experiencing remarkable growth and is poised to become the world’s second-largest market by 2034. It encompasses various types of transactions, driving competitiveness, boosting exports, and revolutionizing logistics. However, challenges such as security concerns, limited customer service, and regulatory issues need to be addressed. 

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APSC Mains Answer Writing Practice Questions and Answers

Candidates preparing for the CSE Mains examination extensively study these topic-wise APSC Mains questions and answers to gain a deeper insight into the subject matter and develop a structured approach to answer them effectively within the allotted time frame.

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