Indian Competition Law: Beyond E-commerce to Omnichannel Retail

Indian competition law, including the proposed Digital Competition Bill, must expand its focus beyond e-commerce to acknowledge the integrated omnichannel reality of the retail market. This perspective shift is crucial given the evolving landscape of how consumers shop and how businesses operate across various channels.

E-commerce’s True Market Share

E-commerce currently represents a small fraction of consumer spending in India, accounting for only 6-7% of the total. Offline retail continues to dominate the market, demonstrating consistent growth and significant consumer preference.

The traditional distinction between online and offline retail has largely dissolved. Consumers frequently transition between digital and physical channels throughout their purchasing journeys, blurring previously clear market boundaries.

Converging Retail Ecosystems

Retailers increasingly operate within a converged ecosystem, where digital-first brands are actively expanding their presence into physical stores. This strategic move highlights a broader trend of market integration.

Traditional kiranas are also leveraging digital tools, such as WhatsApp, for order placement and payment processing. This adoption enhances their competitive position in the market rather than leading to their replacement by digital platforms.

Rethinking Market Definitions

Defining the relevant market strictly as ‘online retail’ would inaccurately portray the actual competitive environment. Such a narrow scope overlooks the substantial contributions of traditional kiranas, modern retail chains, and other offline alternatives.

The authors argue that competition law must consider the comprehensive ways consumers shop, which encompasses both online and offline experiences. An ex-ante regulation based on an overly limited market definition risks becoming misaligned with current market realities.