The online retail industry is booming, and e-commerce sites are on the rise. We take a look at the top social issues in e-commerce that you need to know.
We are living in the age of the internet. Also, we can buy almost anything online from the comfort of our homes. The online retail industry is booming, and e-commerce sites are on the rise.
Research shows that the Indian e-commerce market is going to be a $100 billion industry by 2020. It has become a big business, and you need to know a lot of things to make your brand successfully online. Here we take a look at the top social issues in e-commerce that you need to know.
Top Social Issues in E-commerce That You Need To Know
The Ponzi Scheme Problem
In India, there is an old problem called the “Ponzi scheme”, which has been existing for the last 50 years. A Ponzi scheme is a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors rather than from legitimate business activities or the profit of financial trading. In Ponzi schemes, the schemer acts as a “hub” for investors, bringing them together to make money off each other rather than providing investments or services to outside investors.
A fraudster (the Ponzi Scheme operator) will offer an opportunity to invest in his/her company, which will grow exponentially over a certain period; while this seems like an attractive offer, it’s not always true.
The fraudster usually entices investors by promising a very high return on their investment and revealing some secret information about his/her company that makes it sound really exciting and lucrative, which is why people invest in it.
However, unlike in a normal business set-up, there’s one catch: these companies don’t do anything except collect money from people; no actual product or service is provided for this money!
The trust factor
Many e-commerce websites in India are running Ponzi schemes; people should be aware of it, and they should not invest in such companies. Look up the website online; if you find that the company is not doing any transactions on their website, it’s a red flag. Legitimate companies will always have transaction history and a solid reputation online because they provide a good product or service.
Reasons for popularity of e-commerce sites
There are many reasons people prefer to buy products online; it makes shopping more convenient and easy. Plus, there is no need to go out of the house and spend money on transportation. Moreover, e-commerce sites have a huge collection of products, which makes shopping more exciting.
The Impact of E-commerce on Brick and Mortar Stores
E-commerce has changed the way we shop; customers no longer have to go out of their house and go to brick and mortar stores where they face traffic jams and other problems. They can now sit at home and shop online. However, this has led to a decrease in brick and mortar stores in large cities like Mumbai, Delhi, etc.
As per a recent report by FICCI and Retailers Association of India (RAI), the number of brick and mortar retail shops in India decreased from 1 million to 885,000 between 2011-2015 due to e-commerce sites.
As per another report by ASSOCHAM, the total number of retail outlets in India is expected to decrease from 4 million in 2014 to 3 million by 2023 due to e-commerce sites. This shows that there will be no other option for customers except for e-commerce sites.