The COVID-19 pandemic has accelerated the growth of e-commerce in India, with the market value expected to reach USD 111 billion by 2024 and USD 200 billion by 2026. However, the pandemic has also impacted e-consumers’ behaviour and platforms’ practices, raising concerns related to counterfeit goods, product safety, predatory pricing, grievance redressal, data protection and privacy. To assess the impact of these factors on consumer welfare, CUTS conducted a study analysing the status of e-consumers in India through consumer surveys conducted in 2021 and 2022.
The study evaluates consumer welfare in e-commerce by categorising parameters that influence consumer welfare, such as convenience, cost-effectiveness, consumer confidence, grievance redressal and healthier competition. The 2021 survey found that convenience, costeffectiveness, and variety of products were key motivators for consumers to use e-commerce services. However, the study highlighted the need to improve grievance redressal mechanisms and data protection measures, as consumers expressed low confidence and concerns for these aspects.
The report captures relevant policy including reports by the Standing Committee on Commerce and the Standing lCommittee on Finance that address e-commerce regulation and anti-competitive practices. The growth of e-commerce must align with consumer sensitivities and maximise consumer welfare by including their voices in the policymaking process. This report presents a comparative analysis of consumer welfare in e-commerce for the years 2021 and 2022, considering recent policy developments.
The report underscores the risks and benefits of e-commerce, including unsafe products, unfair business practices, privacy breaches, and weak enforcement of laws. It also emphasises the evolving concept of consumer welfare in the digital economy and the importance of non-price factors such as quality, choice, and innovation. This helped in identifying five parameters: costeffectiveness, convenience, consumer confidence, grievance redressal, and healthier competition.
Cost-effectiveness is determined by factors like discounts, no added expenses, and price comparison options. Convenience includes indicators such as 24×7 ordering, product search, flexible delivery, and multiple payment modes. Consumer confidence is influenced by genuine products, accurate information, transactional security, and data protection. Grievance redressal examines action on complaints, timely resolution, and user-friendly processes. Healthier competition encompasses choice of products, competitive quality, and choice of platforms.
By diving deep into aforementioned issues, the study aims to inform policymakers, regulators, and e-commerce platforms on how to enhance consumer welfare in India. By analysing the impact and strength of the identified parameters, the study quantifies consumer welfare gains or losses between 2021 and 2022. It provides valuable insights into factors impacting consumer welfare in e-commerce and presents actionable recommendations for enhancing consumer welfare in India. The findings will benefit stakeholders in developing a nuanced understanding of e-consumer welfare and contribute to the betterment of policies and regulations.
