Indian government to take on Amazon and Flipkart with GeM, its own online marketplace

The three-year-old online marketplace GeM allows only government departments to buy products so far.

Source: Unsplash.

In a move that might see Indian government directly competing with online marketplaces such as Walmart-owned Flipkart and Amazon, India’s commerce ministry is sounding out a proposal to open its three-year-old online marketplace to the public.

Currently, Government e-Marketplace or GeM, is only available for public sector units and government departments including their employees. The proposal wants to expand the service into a full-fledged B2C model.

A government official on condition of anonymity told Economic Times, “We will set a benchmark for online marketplaces. We plan to make it an ideal platform.”

The process to turn GeM into a B2C e-tailer will happen in three phases. In the first stage, it will allow private enterprises with government contracts to shop. The next phase will let these private firms buy in bulk. And the third chapter will see individual buyers shopping from the platform.

In the fiscal year 2018-19, GeM clocked revenue of around USD 2.4 billion and expects nearly USD 7 billion in FY 2019-20. While in the previous fiscal year, Amazon’s revenue already stood at nearly USD 3.2 billion with Flipkart USD 3.8 billion.

GeM lists a million products on its marketplace with 260,000 sellers on-board catering a client base of 37,000  central and state government organizations. The commerce ministry is currently mulling over a monetization model and plans to levy charges from sellers listed on the portal. Medium and small enterprises account for over 40% of transactions by volume.

Before GeM happened, government entities procured goods and services through fixed-rate contracts and tenders, which stopped soon after the launch of GeM in 2016.

Apart from buying products, the website allows e-bidding, reverse e-auction and demand aggregation with the aim to facilitate transparency, efficiency, and speed in public procurement.

Earlier this year, a women-specific page ‘Womaniya’ was also launched on the GeM platform to promote women entrepreneurs sell products such as handicrafts, accessories, etc. Currently, 143 million Internet users in India are women constituting a 33% share of total Internet users in India.