Problems faced by e-

commerce in rural

areas: A supply chain

perspective By- Ajay kumar meena

(13119005)

Introduction

2% of all transactions today in India are online.

Despite this, e-commerce has limited outreach in rural areas.

A host of problems, ranging from poor internet to language barrier.

Growth of e-commerce sector

Key reasons for low supply-

(industry perspective)

Rank Problem Remarks

1 Last-mile connectivity Road, Transport Infra.

2 Inventory and warehouses Maintenance issues

3 Taxation system Cumbersome

4 Limited credit card accessibility Village Economy

5 Return pick-up Road, Transport infra.

6 Criminal Activity Law & Order issues

Key reasons for low demand-

(customer perspective)

Rank Problem Remarks

1 Language barrier Use of vernaculars

2 Perception towards e-commerce Adaptability issues

3 Poor internet connectivity Very poor for wired net

Successful supply chain

Storeking

a) Bangalore based start-up, StoreKing, an e-commerce platform provider

enables rural customers to shop online.

b) Uses kiosks equipped with low cost monitors and android tablets.

It, at present, has 5000 kiosks across South India- Karnataka,

Tamil Nadu and Andhra Pradesh, delivers over 100,000 orders every month

a) Connected to retailers in villages and small town

b) Very less working capital.

c) Tide up with IOC to provide services across petrol bunks in rural areas

Recommendation

Village retailers can be employed as company agent.

E-commerce websites should be available in regional languages.

Increased utilization of India Post’s extensive network for logistical purposes.

Credit card schemes targeting rural households.

Simplified inter-state taxation policy.

Government Policies and Initiatives

Digital India –

Provide public access to internet: The government aims to provide internet

services to 2.5 lakh villages which comprises of one in every panchayat by March

2017 and 1.5 lakh post offices in the next two years. These post offices will

become Multi-Service centers for the people.

The proposed GST bill-

The objective of GST is to simplify and streamline the indirect tax regime in the

country.

It is a single comprehensive tax regime that will be applicable across all states in

India on the sale, manufacture and consumption of goods and services.

Under GST, both Central and State taxes will be levied on the manufacturing cost

at the point of sale, which will help eliminate the challenge of tax being levied

on the same product/service more than once.

To increase digital payments Indian government has started Lucky Grahak

Yojana and Digi-Dhan Vyapar Yojana.

Pradhan Mantri Jan-Dhan Yojana (PMJDY)-

a) Under the PMJDY, any individual above the age of 10 years and does not have

a bank account can open a bank account without depositing any money.

b) Rupay cards are given to the account holders.

c) Jan Dhan Yojana has seen a great success, about 21 Crore accounts have been

opened in just about one and half year under the scheme. Out of the total

12.87 crore in rural area and 8.13 Crore accounts have been opened in urban

areas.

References

1. https://pmjdy.gov.in/scheme

2. E-commerce and the Rural Sector : Hardikkumar V. Desai ISSN: 2278 – 1323 International Journal of Advanced Research in Computer Engineering & Technology (IJARCET) Volume 1, Issue 9, November 2012

3. E-Commerce Services in India: Prospects and Problems, Ashok Panigrahi, Ranjan Upadhyaya, Dr. P. P. Raichurkar, International Journal on Textile Engineering and Processes ISSN 2395-3578 Vol 2, Issue 1 January 2016

4. http://www.ibef.org/download/The-Rise-and-Rise-of-E-commerce-in-India.pdf

5. http://www.dnaindia.com/money/report-here-s-what-you-need-to-know-about-the-digital-india-initiative-2129525

Thank you…..