Will Assam’s markets survive e-commerce wave?

 Bijoy A. Sangma

(bijoy.sangma@gmail.com)

In the grand march of progress, not all footsteps echo equally. As digital giants tighten their grip on commerce and centralized procurement systems favour the powerful, Assam’s small traders find themselves gasping for survival. If the backbone of local economies is broken, who will carry the weight of true economic inclusivity?

A changing landscape: The dilemma of traditional retailers

The once-thriving lanes of Assam’s bustling markets are witnessing an uneasy silence, a stark contrast to their former vibrancy. Small traders, micro-entrepreneurs, and retail shop owners, who once formed the backbone of the state’s economy, now find themselves grappling with an unprecedented challenge - the digital onslaught of e-commerce giants and the growing dominance of centralized procurement systems like the Government e-Marketplace (GeM). As consumers shift online and procurement becomes increasingly streamlined through bulk purchasing, Assam’s traditional retailers stand at a crossroads, struggling to adapt to a rapidly evolving economic landscape.

E-commerce has undeniably revolutionized the way people shop, bringing convenience, competitive pricing, and an expanded range of products at the click of a button. In India, the sector is poised to grow at a staggering compound annual growth rate (CAGR) of 27%, reaching an estimated Rs 12.22 lakh crore by 2026. This growth is mirrored in Assam, where increasing internet penetration and smartphone accessibility have made online shopping the preferred choice for many. While consumers revel in the ease of doorstep delivery and deep discounts, the consequences for traditional businesses have been dire. Small retailers, who once thrived on local patronage, now struggle to match the aggressive pricing strategies, expansive inventory, and logistical advantages of digital retail giants.

In the heart of Guwahati’s Pan Bazaar, a well-established bookstore that has served multiple generations finds itself battling dwindling footfall. Online platforms offer books at significant discounts, often below the price at which the store can procure them. Customers browse the shelves, take note of the titles, and then place orders online for cheaper alternatives. The store’s owner, once confident in his loyal customer base, now faces an unsettling reality - technology has disrupted the age-old business model that relied on in-person transactions and relationships built over years.

The Digital Divide: Barriers to Adoption for Small Businesses

While the most apparent solution might be for traditional retailers to embrace digital transformation and enter the online marketplace, the reality is far from simple. Many small businesses lack the technical know-how, financial resources, or infrastructure to successfully transition to e-commerce. Setting up an online presence requires investment in digital tools, website maintenance, online advertising, and delivery logistics, all of which demand resources that many small entrepreneurs do not possess.

A study conducted in Assam highlights significant barriers to e-commerce adoption among small enterprises. Many business owners are either unfamiliar with the technology or lack the time and expertise to engage with online platforms effectively. The financial burden of setting up an e-commerce operation - from inventory management software to secure payment gateways - is a substantial deterrent. Moreover, many parts of Assam, particularly rural areas, continue to experience unreliable internet connectivity, making seamless digital transactions difficult.

Cultural resistance further exacerbates the problem. Many shopkeepers, accustomed to face-to-face interactions and cash transactions, remain sceptical of online business models. Unlike larger corporations, which have dedicated teams to handle digital sales, these small businesses operate with limited staff, making it difficult to navigate the complexities of digital commerce. The result is a widening gap between traditional and modern retail, leaving many small businesses struggling to find their place in an increasingly digital world.

The Impact of GeM: A Centralized System That Leaves Small Suppliers Behind

Beyond the dominance of e-commerce platforms, another formidable challenge for Assam’s small traders and suppliers is the Government e-Marketplace (GeM). Introduced to streamline public procurement, GeM was envisioned as a platform that enhances efficiency, reduces corruption, and ensures transparent dealings between government buyers and suppliers. While these objectives have been largely achieved, the platform’s impact on small and micro-enterprises has been less than favorable.

GeM has resulted in substantial government savings, with procurement costs reduced by up to 25%. However, the beneficiaries of this streamlined system are predominantly larger corporations with the capacity to fulfill bulk orders and meet the stringent compliance requirements imposed by the platform. Small vendors, who once relied on government contracts for their livelihood, now find themselves pushed to the margins.

Many small suppliers face significant hurdles in adapting to GeM. The bureaucratic process of registration and compliance can be overwhelming for small entrepreneurs who lack administrative support. The requirement for bulk supply often disqualifies smaller businesses that operate on limited production capacities. Moreover, payment delays - though unintended - create cash flow crises for smaller suppliers who depend on steady income streams to sustain their businesses. The net effect is that small traders, who once thrived on government procurement, are now finding themselves sidelined, struggling to remain relevant in an increasingly centralized system.

The Human Cost: Stories of Struggle and Adaptation

The challenges faced by Assam’s small business community are not just economic; they are deeply personal. Behind every struggling retail shop or supplier is a family facing financial uncertainty, livelihoods at risk, and generations-old businesses fighting for survival. In the town of Jorhat, a family-run garment store that has been in operation for over four decades has seen its sales plummet as online fashion retailers lure customers with steep discounts and free returns. Despite offering high-quality fabric and personalized service, the store finds it impossible to match the deep-pocketed advertising budgets of e-commerce giants. The owners have attempted to leverage social media to drive sales, but with limited success. The digital transition, while promising, remains an uphill battle for businesses accustomed to traditional models.

Similarly, in Udalguri in Assam’s Bodoland Territorial Region, a skilled handicrafts artisan who once found steady buyers through government orders is struggling to sustain his craft. With centralized procurement favouring larger suppliers, his intricately woven bamboo products are no longer in demand. Attempts to sell through e-commerce platforms have been met with logistical challenges, from unpredictable courier services to high commission fees imposed by online marketplaces. The digital revolution, instead of empowering small artisans, has inadvertently made their survival more precarious.

A Path Forward: Policies for Inclusive Growth

The challenges facing Assam’s small businesses are formidable, but they are not insurmountable. If the government, industry stakeholders, and entrepreneurs work together, solutions can be found to ensure that traditional businesses are not left behind in the digital age.

Investing in digital literacy programmes for small business owners can help bridge the knowledge gap and empower retailers to use online platforms effectively. Financial support in the form of subsidies or low-interest loans can assist small traders in building digital infrastructure and marketing their products online. Infrastructure improvements, particularly in rural areas, can enhance internet connectivity, making e-commerce more accessible to a wider segment of Assam’s business community.

Simplifying GeM’s registration and procurement processes can create more opportunities for small suppliers to participate in government contracts. Special provisions, such as quota-based procurement for micro and small enterprises, can level the playing field, ensuring that small businesses are not squeezed out of public procurement entirely.

Encouraging the development of regional e-commerce marketplaces that prioritize local businesses can also serve as a counterbalance to the dominance of national and global e-commerce giants. Platforms specifically designed to promote Assamese products - whether in handicrafts, textiles, or agro-based industries - can create a unique digital ecosystem that supports local entrepreneurs.

Balancing Progress

with Preservation

The digital economy is here to stay, and Assam’s small businesses must find ways to navigate this new reality. However, progress must not come at the cost of erasing the traditional businesses that have long been the backbone of the state’s economy. E-commerce and centralized procurement systems must be made more inclusive, ensuring that the benefits of digital transformation are shared equitably across all levels of business.

If left unchecked, the current trajectory could deepen thousands of small entrepreneurs into financial distress, widening income disparities and accelerating job losses in Assam’s retail sector. The challenge, therefore, is not just about embracing digital transformation - it is about doing so in a way that empowers rather than excludes. Assam’s economic future depends not on the survival of the fittest, but on the creation of an ecosystem where tradition and technology coexist, ensuring sustainable and inclusive growth for all.