Inefficient e-tail: Not got your Diwali parcel yet? Blame the rush and tax issues

First and foremost roll out the much-delayed tax reforms

FP Staff October 24, 2014 11:00:54 IST
Inefficient e-tail: Not got your Diwali parcel yet? Blame the rush and tax issues

Did you order a Diwali gift online? Chances arethe gift is not delivered yet, for most customers are getting delivery failed messages.

According to a report in the DNA, Diwali orders from various e-market places are piling up at the logistics firms due to lack of enough infrastructure to deal with the big rush and tax issues.

For online retailers, Diwali started early this time - the dayJeff Bezos of Amazon arrived in India and Flipkart launched its Big Billion Day sale. That was a good 25days ahead of Diwali.

On the Big Billion Day, customers thronged Flipkartand other websites attracted by the rock bottom prices and mind numbing discounts. Theyordered everything from mobile phones to home appliances. Though the offer was only for one day, the sale continued as Diwali drew near. However, the orders that they placed for Diwali seem to be stuck due to various reasons from tax issues to technical glitches.

A Blue Dart customer care executive has told the DNA newspaper that except Flipkart, which has own delivery service, all other etailers have failed to keep the speedy delivery promise.

The report says FedEx, a logistics company, has not been able to deliver about 6,000 parcels in Patna city alone as the tax department there is seeking value added tax on the products. Apart from Bihar, the companies are facing tax-related delays in Maharashtra, Karnataka, West Bengal and Gujarat too.

Most logistics players accept that there are technical problems.

"I think as a supply-side player, we need to beef up further to manage demand," Sahil Barua, CEO and co-founder of Delhivery, a logistics company, has been quoted as saying in a report in the Business Standard.

He accepts that the company needs to invest more in capacity. "With the Google Online Shopping sale and Diwali, we are continuing to prepare ourselves to match the demand," Barua has told the newspaper.

Flipkart's Big Billion Day had also turned out to be a big fiasco with the website crashing as it was unable to cope with the huge surge in traffic.

While the recent online offers and flash sales have managed to create abuzz and provided a much-needed boost for demand, which is good for the economy, the truth is that e-commerce in India is straddled with issues of inefficiencies.

Day by day, there are new growth estimates for the sunrise sector. eTailing India Founder Ashish Jhalani has said that Indian e-commerce industry will grow 700 percent in seven years to hit $90 billion by 2021.

While there is no reason to believe that the new figure is an overstretch given the consumer interest, there is much to be done to accomplish it.

First and foremost isrolling out the much-delayed tax reforms, by bringing in the Goods and Services Tax legislation. The government should stop dithering, pull up its socks and welcome the new sector with an open mind. It will only benefit the economy.

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