Internet-enabled trade helps 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," says a recent report by online marketplace eBay. In fact,
nearly 32% of exporters on eBay India are newcomers, according to thetimesofindia.
In fact, consumers living 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.
"Another key source of welfare gains
derived from internet enabled-trade is access to products as ecommerce
platforms reduce search costs and make products tradable that were otherwise
not sold. This directly benefits sellers and consumers. The report also
calculated the welfare gains that would prevail if all international trade were
to become internet-enabled. For India, the welfare gain was estimated to be
67%, the third highest among the leading countries of the world," eBay
said.
Nevertheless, the full potential of
Internet-enabled trade has not yet been realised. "This form of trade
requires an enabling policy environment. It is currently subject to a wide
range of restrictions and faces trade barriers, especially for cross border
transactions (exports and imports)," eBay said.
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