India mistaken in blocking Chinese e-commerce

By Zhang Hongpei Source:Global Times Published: 2018/12/13 23:34:50

Open mind for foreign investment key to economy: analysts

An employee pulls a cart stacked with packages at the Inc fulfillment center in Hyderabad, India Photo: VCG

Indian consumers are buying Chinese products via e-commerce platforms out of their own choice, and unreasonable limits on these purchases will bring costs up for India's consumers and hinder its newly emerging economy, experts told the Global Times Thursday.

The South Asian country should adapt to the globalization trend as represented by the cross-border e-commerce sector and try to seize opportunities instead of walking further along the path of trade protectionism, the experts stressed.

The comment followed a report by Indian newspaper Economic Times (ET) on Tuesday, claiming that the Indian Department of Industrial Policy and Promotion had suggested capping purchases of products from Chinese e-retailers and apps at four per buyer per year, citing a senior official.

The suggested move was triggered by concerns over an adverse impact on India's local manufacturing if most products are imported, said the report, which also referred to two China-based cross-border platforms - Club Factory and Shein.

Club Factory, based in Hangzhou, capital of East China's Zhejiang Province, ranked first in the cross-border e-commerce sector in the Indian market. Among its more than 70 million users worldwide, about 40 million came from India since its launch more than a year ago, according to a report by industry website in September.

Shein, a fashion e-commerce platform based in Nanjing, capital of East China's Jiangsu Province, tripled its business in India within one year, catering to more than 1 million active users per day, said the ET report.

Club Factory and Shein declined interview requests from the Global Times on Thursday.

Although cross-border e-commerce sales only take up a small portion of Indian online sales at the moment and the practice is still at the rudimentary level, it is an unstoppable trend and it is time for the country to open its mind, said Huang Rihan, executive dean at the Beijing-based Digital Economy think tank.

Huang told the Global Times Thursday that "it is very ridiculous and irrational to suggest the cap should be four products per year per buyer."

"If India takes a move to set such caps, the country is bringing damage to its own newly emerging economy," he added.

Long Xingchun, a visiting senior fellow at the S. Rajaratnam School of International Studies, Nanyang Technological University, told the Global Times Thursday that even if the e-commerce law of India is revised based on a rule to limit purchases from China, it will not work as consumers still can find other ways like third-country platforms to buy what they want. "It is actually harming its own consumers' interests," Long noted.

"As more Indian consumers are pursuing quality products with a good cost performance, they would like to make Chinese products their first choice," Huang noted.

According to a series of detailed surveys conducted by LocalCircles, 83 percent of 8,973 Indians prefer a Chinese product over its Indian version as they believe these products are cheaper and that Indian goods are quite expensive, the Hindustan Times reported in August 2017.

Chinese tech giant Alibaba Group Holding has invested in multiple Indian e-retailers, logistics and mobile payment firms over recent years, aiming to gain a stake in the emerging sector in India.

Research from Morgan Stanley projected that India's online retail market will explode from $15 billion in 2016 to $200 billion in 2026. Currently, Flipkart is the market leader, followed by Amazon and Snapdeals, media reports said.

Huang noted that India can use its advantages - a big population, internet development and improvement of logistics - to embrace its own robust growth of e-commerce instead of blocking China's.

Long said that India is still not open-minded in attracting foreign investment.

"They think foreign firms enter their country with merely the aim of making money. They omit the larger significance: foreign capital also means technology, talent and other important factors," Long noted.


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