The 'e' side of trade in India, from eBay's view

MUMBAI, INDIA: The full potential of internet-enabled trade has not yet been realised. Internet-enabled trade needs an enabling policy environment. It is currently subject to a wide range of restrictions and faces trade barriers, especially for crossborder transactions (exports & imports).

Internet-enabled trade helps to provide a level-playing field for small entrepreneurs. National and export sales are less dominated by the largest firms, and new firms have fairly high shares in overall sales. This is because entry barriers for Internet-enabled trade are lower, which makes it easier for newcomers to enter the market. Thus commerce platforms such as eBay have a pro-competitive effect. 32 per cent of exporters on eBay India are newcomers.

Interestingly, eCommerce supports the domestic economy and bring remote sellers and buyers closer together. With domestic sellers on eBay India reaching out to an average of 19 states across the country, eBay boosts inter-state trade in India. Sellers located in Delhi and Maharashtra by far dominate as the largest net exporters within India. Kerala, Karnataka and Andhra Pradesh are the largest net consumers within India on the eBay platform. The five largest inter-state trade flows, which are from Maharashtra to Karnataka as well as to Tamil Nadu, followed by flows from Delhi to Karnataka, Maharashtra and Tamil Nadu.

Also, Internet-enabled trade enhances competition and reduces prices because it offers businesses very low market entry barriers. Consumers in remote or rural areas benefit most in these markets, where competition is traditionally weaker because there are fewer suppliers. Lower prices also lead directly to welfare gains because a high level of competition, allowing buyers to compare prices from a variety of retailers, helps bring prices down.

eBay sellers tend to export and do so to an average of 31 international markets. Over 98 per cent of eBay sellers export in contrast with only 10 per cent of traditional firms. Distance matters around 65 per cent less on eBay than for traditional trade. Today, United States, United Kingdom and Australia are India's main trading partners on eBay while Australia & Russia are experiencing the largest export growth from India.

These were some of the key findings of the COMMERCE 3.0 report by eBay.eBay India has released the COMMERCE 3.0 report to showcase the impact of internet-enabled trade in the country. The report is said to provide insights on how Indian merchants trade nationally and internationally through online channels thereby contributing significantly to the Indian economy and contrasts it with the dynamics of traditional trade.

The report explains the critical role of new technologies in revolutionising the way Indians buy and sell.