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India’s burgeoning e-commerce sector has significantly contributed to job creation, generating 15.8 million jobs, including 3.5 million positions for women, according to a new report released on Wednesday.
The study, titled “Assessing the Net Impact of e-Commerce on Employment and Consumer Welfare in India,” was launched by Commerce and Industry Minister Piyush Goyal.
E-Commerce: A Key Driver of Employment Growth
The report, prepared by Pahle India Foundation (PIF), a Delhi-based policy research institute, underscores e-commerce as a major force behind employment growth in the country.
The study found that online vendors employ an average of 54% more people than their offline counterparts, with nearly double the number of female employees.
“Plugging in data from our survey, we estimate that online vendors generate 15.8 million jobs, including 3.5 million jobs for women,” the report stated.
Impact on Retail Sector and Consumer Behavior
The report highlights that rather than displacing traditional physical markets, e-commerce is expanding into new territories, particularly in Tier 3 cities. It noted that consumers in these smaller cities are increasingly spending more on online shopping compared to those in larger cities, signifying a shift in consumer behavior.
“Our data shows that a higher percentage of Tier 3 city consumers spend more than Rs 5,000 per month on online shopping as compared to consumers from bigger cities,” the report added.
Survey Insights: Employment, Skills, and Business Performance
The report’s findings are based on a comprehensive survey conducted across 35 cities in 20 states and Union Territories, involving 2,062 online vendors, 2,031 offline vendors, and 8,209 consumers.
The analysis revealed that each e-commerce vendor, on average, employs about 9 people, including 2 women, while offline vendors employ about 6 people, with only 1 being female.
The study also indicated a rise in employment across various skill levels, from high-skilled roles in management and marketing to low-skilled functions in warehousing and logistics. The growth of e-commerce and digitalization has, according to the report, fundamentally changed the skill sets and roles required in the industry.
Business Performance and the Future of Retail
“E-commerce integration has accrued significant benefits to vendors from smaller cities and micro-enterprises,” the report noted, emphasizing the positive shift in business performance for online vendors. The study found that 60% of vendors reported increased sales, while 52% noted higher profits since listing online.
“Overall, more than two-thirds of the online vendors interviewed experienced an increase in online sales value and profits in the past year,” the report said, adding that 58% saw an increase in both.
The report also made a strong case for offline vendors to consider listing on e-commerce platforms or adopting an omni-channel strategy to tap into the benefits of digital retail.
Changing Consumer Preferences
In addition to employment growth, the report delves into how e-commerce has reshaped consumer behavior, driven by factors like convenience, product variety, and accessibility.
“A highly engaged consumer base is indicated by the fact that more than 50% of all respondents to the survey spent more than two hours on e-commerce platforms a week, and that 70% made a purchase via e-commerce in the last month alone,” it said.
Industry Leaders Weigh In
Former NITI Aayog Vice Chairman Rajiv Kumar, speaking at the report’s launch, emphasized the transformative impact of e-commerce on India’s retail landscape.
Meanwhile, Saurabh Garg, Secretary of the Ministry of Statistics and Programme Implementation (MoSPI), praised the government’s efforts in expanding digital public infrastructure, which has facilitated the smooth expansion of e-commerce across the country.
