Sidhartha Shukla

moneycontrol.com



With weak global environment India as an emerging market has to depend a lot on domestic factors for the sake of job creation.

In the coming decade the country needs to create 80 million jobs, and as per a report by HSBC it might fall short by 24 million if business and economic growth is as usual.





To mitigate this huge deficit, e-commerce industry is expected to play a major role as services are not creating enough new jobs.

The report suggests that e-commerce can generate a total of 20 million jobs by 2025 across logistics and delivery, and customer care, IT and management.

Some jobs will be lost to 'bricks and mortar' stores but accounting for that, e-commerce could create 12 million new jobs -- filling half the job deficit -- as per the report.

Real wage growth on the back of rising economic growth potential and convenience of buying online can increase India's consumption demand.

HSBC's report suggests that the ratio of online purchases to total consumption -- an indicator of e-commerce penetration -- is rising. When this ratio is aligned with growth in real wages it helps to determine whether the combination of higher convenience from shopping online and higher incomes do indeed increase total consumption in the economy.

The report further says, “Having established that India’s e-commerce experience is likely to mirror that of China’s, and that India’s experience so far has been lagging China’s by seven years, we project India’s online purchases to consumption ratio over the next decade in line with China’s experience (with a lag of seven years)."

From the current scenario it seems that the stars have aligned in support of e-commerce companies.

Creating a physical and digital infrastructure in the country will be a necessity to enable e-commerce networks to spread and also to raise potential growth and wages that can boost consumption demand.

Government initiatives like ‘Make in India’ have an equally important role to play in the growth of the e-commerce industry, without which the industry will grow at the cost of rising external imbalances and macro instability.