GeM was launched in 2016 to bring in transparency to the procurement process of various departments. It aims to streamline and improve efficiency in public procurement through e-bidding.
“GeM attained an annual procurement of Rs 1-lakh crore within FY22, representing a 160% growth compared to last FY. GeM has taken a host of steps to onboard products of self-help groups (SHGs), tribal communities, artisans, weavers and MSMEs. 57% of the total business on GeM has come through the MSME units, and female entrepreneurs have contributed over 6%,” says the economic survey.
It notes that an increase in smartphone penetration, internet adoption and purchasing power of rural customers has helped e-commerce business go to many corners of the country. Calling this growth “phenomenal”, the survey says fiscal support during the pandemic also helped boost e-commerce penetration in rural areas as people were not keen on physical contact. The potential here is still to be tapped.
“A vast untapped rural market holds the potential for strengthening consumption growth; new e-commerce companies like Trell, Meesho, and shop 101, are expanding and gaining popularity in tier-3 and -4 cities. The e-commerce industry is focusing on local solutions to penetrate rural areas by strengthening the network of rural distributors and retailers and using local distribution centres as pick-up and drop off points, enabling logistics companies to serve rural consumers,” says the Survey.
This trend is encouraging as it helps e-commerce companies expand their market, gives rural customers access to products from around the world and stimulates consumption in rural areas. Marketplaces such as Tribes India, for example, have helped tribal artisans take their products to the international market. Another initiative the survey highlights is the One District – One Product (ODOP), which onboards sellers in rural areas to e-commerce platforms.
Economists and entrepreneurs have often referred to the advantages of tapping the rural economy. A Bain and Company report of March 2022 notes how the large rural ecosystem is growing steadily. “The rural economy contributed nearly half the nation’s overall GDP in 2019-2020 and employs 350 million people (68% of the total workforce). Over the last five years, the rural ecosystem has grown about 10% per annum — and still has strong headroom for growth,” it says.The government has been taking steps to tap this segment. The Digital India program and the Unified Payment Interface have given e-commerce a leg up in India. “There have also been various initiatives to provide an opportunity to small retailers, manufacturers and self-help groups for greater outreach,” says the Economic Survey.
