E-commerce in India has not taken off as expected

Bangalore, Sept 18 (PTI): Rediff Founder and CEO Ajit Balakrishnan today said e-commerce in India has not yet taken off as expected, but hoped government's committment to make huge investment to create back-hall broadband infrastructure would give a filip to online shopping. This was because credit card penetration is low in India and failure rate of debit card transaction is 50 per cent,he said. "A debit card based e-commerce is possible,though there are challenges. Broadband connectivity between banks is just building in India. Unless the banks telecom infrastructure is super, it can?t be pulled off. There are 120 million Indians with debit plus ATM cards," he told PTI. With e-commerce,the challenge is margins and so there has to be a payment system where it is no more than three per cent."If the operator keeps 50 per cent it is not worth business," Balakrishnan said. He rued that the concern in India was the political economy of telecom companies, which never attempted to invest in broadband as their returns are after 20 years unlike cellular phones, where valuation is based on number of subscribers. "In every country you find when broadband picks up, that's when e-commerce picks up. When e-commerce picks up then advertisement picks up... This is not happening in India." On his reasons for e-commerce picking up pace in the near future, Balakrishnan said he was certain that the government would make investments to create back-hall infrastructure for broadband."There's also a TRAI plan to spend Rs 35,000 crore..I think we need to put the weight behind it," he added. MORE PTI BDN APR

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