E-commerce in India

06 March, 2013

Today, we travel to India, where millions of people are sitting at their computers, just waiting to buy something new. Also, we’ll go to California to hear about industrial robots and American workers.

If you have a product to sell on the Internet, look to India. “E-commerce” there has increased 400 percent in the past five years. Onka Dekker tells about spending money with the touch of a button.

India now has about 20 million people who buy things over the Internet. Many of these customers are young people who have busy lives and knowledge of technology. Most also have good jobs that pay well.

Kunar Bahl helped create a business called “Snapdeal.com.” He sells coupons, discount cards, and now many other products that people traditionally found only in stores. He understands the power of “online” shopping.

“What we thought we would do in sales in three months, we did in one week, in the first week.” 

Snapdeal went online three years ago. Kunar Bahl hopes his sales will hit one billions dollars by 2015.

But selling things on the Internet is not always easy.

Many companies are forced to cut prices and pay shipping costs if they hope to compete. This means less profit for each product sold.

Together, Indians spend 500 billion dollars a year on retail purchases. Internet sales are responsible for only a small part of that. But sales are expected to grow 17 percent each year.

Rahul Jagtiani is pleased with the success of his company’s website, “plushplaza.com”. His family sells gifts and things for the home.  At first, he was concerned that buyers would miss being able to touch the products, but “If products are showcased well, and the photography is good, and your integrity is good, we can bridge that gap. It’s been pretty good so far.”

Business research companies estimate that two thirds of India’s 1.2 billion people are under the age of 35. That population group is expected to lift Internet sales from 10 billion dollars now to 70 billion dollars by 2020.

The tide is changing. Or, at least, it may be. For many years, the United States has been losing jobs to China and other places where workers get low pay. But for now, America’s manufacturing industry is growing again.

Sunit Saxena is the chief of Altierre Digital Retail in San Jose, California. His business makes store signs that can be changed by a computer.  He recently moved his production operation back to the United States from China.

“Just like everyone else we started in China because the cost of labor was low, but then as we went further down this path, they started raising the rates on us in China.” 

Altierre emplys about 60 workers, fewer than it had in China. They are paid about 10 dollars an hour.  The workers use new robots. These electronic devices have helped to double the amount of products his company makes. Altierre plans to increase this automatic process, but not in an effort to cut jobs. Instead, it hopes to employ more people with greater skills. Earthbound Farm of California is one of the largest producers of organic, or naturally grown, foods in the United States. It now uses robots to pack its products. Each of the machines can do the work of four people. But company Vice President Will Daniels says no one has lost his job.

“Instead of replacing those workers, we are actually providing them with a higher skill set. Those folks who were working on the line packing that product, where our robots are, for example, are now actually operating the machines.” 

Most of the time, robots are used to do the same kind of work again and again. But some companies are working to build machines that can recognize and choose between objects of different sizes and shapes. These robots might be used to load trucks or ships.

Is that a good thing, or a bad sign for American workers? A number of manufacturing officials think that more people, with greater skills and knowledge, will still be needed in the future.

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