Abstract
The expansion of e-commerce post-Covid-19 pandemic has widened its environmental footprint the world over and in India. Managing sustainable supply chain operations and incorporating sustainable practices are big challenges for the e-commerce industry in India. Plastic leakage into nature is the largest sustainability challenge currently in the eCommerce industry. The e-commerce companies through their environmental practices need to ensure that the boxes and bubble mailers should reach the recycling plants and not landfills. It is an opportune time to invest in a circular economy model to build a resilient economy and rectify the climate problems to make future generations reap the fruits of the economic, environmental, and societal benefits of a new era. This new era of circular economy of sustainable businesses will certainly reward those who will take leadership in terms of environmental initiatives. As the green trend continues to rise the role of sellers and suppliers in e-commerce business is gaining importance in the circular economy.
TopBackground
India has an Internet user base of about 850 million adding around 6 million new entrants every month. One in every three Indian shops via smartphone and online retailers delivers 30,000 pin-codes out of the 100,000 pin-codes in India. The penetration of e-commerce expanding due to significant contributions from tier-2 and tier-3 towns and villages in India on account of the rising use of local languages in e-commerce businesses. India's e-commerce market was worth about $20 billion in 2021. Electronics and Apparel are the biggest categories in terms of sales along with other luxury products like jewellery, fashion, grocery, travel, food delivery, and fintech. The prominent e-commerce companies in India are Amazon, Flipkart, Snapdeal, Meesho, and Reliance Mart.
The Covid-19 pandemic give a spurt in the e-commerce industry in India. From February 2020 to June 2020 during the Covid-19 lockdown period, e-commerce increased by 117% with the delivery of only essential supplies. As per property consultant Colliers International, the demand for warehousing of 5,000 to 10,000 square feet size increased due to COVID-19 lock-downs which lead to a surge in online orders of essential items for same-day delivery, especially in tier-1 cities like Mumbai, Kolkata, Bengaluru, Chennai, and New Delhi. E-commerce player Flipkart began Quick hyper-local service in Bengaluru with 90 minutes deliveries. Amazon observed a spike in page views with a five times increase in “Add to Cart” during the lockdown, leading to a doubling of sales. The count of Amazon warehouses in India stands at 60 across 15 states which have an area equivalent to more than 100 football fields.
In 2021, the number of online users increased to 250 million mark from 150 million in 2019. This increase is attributed to the growth of the e-commerce industry in India. Of the total online retail market of $50-60 billion, 60% comprises products and the rest comes from services. Travel, transport and tourism, consumer appliances, and electronics contribute 50-60% to the business and these categories have the highest e-commerce penetration. Categories like grocery, education, health, and home & living contribute only $10-15 billion to the overall online retail pie. The growth in internet users, reduction in data prices, and changing consumer behaviour are the key growth drivers for the evolution of e-commerce in India. The changing online retail market in near future shall mainly be driven by underpenetrated categories like grocery, education and health. Online retail is shifting from electronics to grocery. Customers are buying grocery products from online shopping platforms. Consistent digital exposure, combined with the presence of available Omni channel touchpoints, has resulted in the development of a new consumer purchasing process.
Key Terms in this Chapter
Sustainable Finance: Sustainable finance is defined as investment decisions that mainly consider the environmental, social, and governance (ESG) factors.
Circular Economy: Circular economy promotes designing products for durability, reuse, remanufacturing, and recycling to keep materials circulating for as long as possible
Plastic Leakage: Plastic leakage is the macro- and microplastics that are not kept in a circular loop or properly managed at their end-of-life, and thus leak into the environment.
Supply Chain Management: Supply chain management is the management of the flow of goods and services and includes all processes that convert raw materials into finished final products.
SME: Small and mid-size enterprises (SMEs) are businesses that maintain revenues, assets, or a number of employees below a certain threshold.
Sustainability: Sustainability means meeting our own needs without compromising the ability of future generations to meet their own needs.
E-Commerce: Electronic commerce (e-commerce) refers to companies and individuals that buy and sell goods and services online using the Internet.