When the telephone was invented, people spread far and wide were finally able to communicate with each other. All they needed was a length of copper wire on the telephone at two ends and whatever they said could go from the speaker at one end to the receiver at the other end. As more people got telephones, towns began to set up telephone exchanges, to which all phones in an area could be connected so that operators could physically connect callers to the people they wanted to talk to. .
This was the era of circuit-switched telephony, so called because one had to physically switch the circuits in the exchange to connect a call. But circuit-switched telephony could not progress beyond a point. A circuit, once connected, cannot be used for anything else, which is why there was a limit to the number of simultaneous connections that any exchange could support. If distant communication was going to spread far and wide, we needed an entirely new paradigm.
Today’s telephone systems use packet-switched networks, the same technology that powers email communications. This technique splits messages into smaller packets, each with its own header that contains essential information about the message – where it is from, where it is going and where it is in the sequence of all other packets that contain the message. situated at. All these packets are dumped into the Internet and bounced from node to node in the general direction of their intended recipient. Each packet is free to take its own route, but no matter which way they all take, they will inevitably land at their destination, more often than not, where the recipient’s computer reassembles them into a coherent message for the intended recipient. collects from.
Because technology breaks our messages into smaller packets of data, today’s communication systems are able to utilize the full potential of our data infrastructure. This makes it possible for text, voice and video messages to flow simultaneously through the same data pipe and still reach their intended recipients with reliable certainty.
To extract greater efficiency from existing systems, we sometimes need to break down the atomic units of those systems into even smaller pieces, so that we can re-imagine how they can be put together. It is the idea rooted in the concept of ‘unbundling’ that has been featured so many times in these pages and has been successfully implemented by India on many of the digital public goods that it has introduced.
When we think of retail transactions, we rarely break them down into their component parts. Every transaction is made up of at least two distinct steps: discovery (which occurs when we identify what we want to buy) and purchase (when we pay for everything we choose). ). E-commerce adds two more steps: ordering and delivery. However, since e-commerce platforms are focused on taking buyers quickly and seamlessly through the process of searching, ordering, buying, and delivery, we rarely think of e-commerce this differently. .
The government has always strictly controlled the e-commerce sector, at least partly out of fear that the global retail giant could destroy the livelihoods of millions of small traders in the country if we do not cut investments in the sector. can. Yet, despite these restrictions, foreign investment has reached the point where India’s e-commerce market is currently the world’s eighth largest market, with revenues exceeding $50 billion in 2020 and more than any other market. is growing rapidly. Today more than 300 million Indians actively consume e-commerce products. During the pandemic, digital options have been a lifeline for businesses and consumers alike.
Today, India’s retail infrastructure is highly sophisticated. We have world-class payment and delivery systems that may have been built to meet the demand generated by India’s e-commerce titans, but are currently being widely used outside those contexts. With the help of UPI, one can transfer money to anyone else using a mobile phone. Services like Dunzo and Swiggy Genie can deliver almost anything within a city, while courier services move products across the country seamlessly. E-commerce in India is no longer just about the big platforms that dominate the public perceptions of the sector, but also the various unbundled components that we have started using to extract more potential from our commercial infrastructure.
It is time to rethink our approach towards e-commerce regulation and thus take better advantage of our present reality. Instead of protecting our small merchants, we need to empower them to take advantage of the unconnected components of our e-commerce infrastructure. Instead of restricting foreign investment, we need to ensure that the services from these investments are available to shoppers and small business owners alike – through open, interoperable protocols that are linked together into simple technology solutions. which will enable hyperlocal commerce on a large scale.
If we can do that, there will be no need to ban foreign direct investment (FDI) in this sector or to create an artificial distinction between ‘marketplace’ and ‘inventory’ model of e-commerce. After all, the only reason those categories were created was to regularize the complex structures that had to be built to find a way around our FDI restrictions.
Rahul Mathan is a participant in Trilegal and also a podcast called Ex Machina. His twitter handle @matthan . Is
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