Data Privacy and Online Fraud: Emerging Challenges for E-commerce Growth in India
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Economic Survey: Data privacy issues, online frauds emerging as e-commerce growth hurdles
Issues related to data privacy and rising online frauds are emerging as significant hurdles in the growth of e-commerce in India, said the Economic Survey 2023-24 tabled in Parliament on Monday. Citing third-party data, the survey said that the e-commerce industry in India is expected to cross USD 350 billion by 2030 and called for the need to educate users on the safe use of e-commerce platforms. "The rise of e-commerce is constrained by inadequate skills required for online selling, such as cataloguing. Data privacy issues and increasing online fraud have turned out to be the most significant hurdle in the growth of e-commerce in India. It becomes imperative to educate users on the safe use of e-commerce platforms," the survey said. The survey mentioned that India's e-commerce market has gained significant momentum during the past few years, owing to technological advancements, evolving new-age business models coupled with government initiatives like the Digital India program, UPI, One District - One Product (ODOP), Open Network for Digital Commerce (ONDC), new foreign trade policy, easing of FDI limits and Consumer Protection (E-Commerce) (Amendment) Rules 2021. It has identified data privacy and cybersecurity as critical concerns in the digitisation of services in the country and called for adopting strong security measures, compliance with privacy regulations, and innovation, among others. "Data privacy and cybersecurity have become critical concerns with the increasing digitisation of services," according to the survey. It said that the government is spearheading data protection laws and cybersecurity policies to safeguard consumer data and strengthen cybersecurity measures in the services sector. "To further embrace technology with confidence, ensuring the adoption of strong security measures, compliance with privacy regulations, and fostering innovation in security technologies are essential," the survey noted. It said the future of e-commerce is built on the enhanced user experience through AI, seamless digital payment methods, innovations like UPI, and business engineering data analytics for business operations and enhancements. The survey mentioned that the buyer ecosystem in India is evolving at a very sharp rate, and business models will need to innovate to serve the needs of a diverse shopper base regarding service expectations, price sensitivity and language requirements. "Local language platforms are needed as the shopper base expands to tier-2 and tier-3 cities. Growing startups and innovative social media platforms provide an opportunity to test unique business models that might be targeted to specific demographic cohorts," the survey said.
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Data privacy issues, online frauds emerging as e-commerce growth hurdles: Eco Survey
The survey mentioned that India's e-commerce market has gained significant momentum during the past few years, owing to technological advancements, evolving new-age business models coupled with government initiatives like the Digital India program, UPI, One District - One Product (ODOP), Open Network for Digital Commerce (ONDC), new foreign trade policy, easing of FDI limits and Consumer Protection (E-Commerce) (Amendment) Rules 2021. It has identified data privacy and cybersecurity as critical concerns in the digitisation of services in the country and called for adopting strong security measures, compliance with privacy regulations, and innovation, among others. "Data privacy and cybersecurity have become critical concerns with the increasing digitisation of services," according to the survey. It said that the government is spearheading data protection laws and cybersecurity policies to safeguard consumer data and strengthen cybersecurity measures in the services sector. "To further embrace technology with confidence, ensuring the adoption of strong security measures, compliance with privacy regulations, and fostering innovation in security technologies are essential," the survey noted. It said the future of e-commerce is built on the enhanced user experience through AI, seamless digital payment methods, innovations like UPI, and business engineering data analytics for business operations and enhancements. The survey mentioned that the buyer ecosystem in India is evolving at a very sharp rate, and business models will need to innovate to serve the needs of a diverse shopper base regarding service expectations, price sensitivity and language requirements. "Local language platforms are needed as the shopper base expands to tier-2 and tier-3 cities. Growing startups and innovative social media platforms provide an opportunity to test unique business models that might be targeted to specific demographic cohorts," the survey said. PTI PRS PRS BAL BAL BAL
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The Economic Survey 2023-24 highlights data privacy concerns and online fraud as significant hurdles to e-commerce growth in India, despite the sector's rapid expansion and increasing internet penetration.
E-commerce Growth and Challenges in India
India's e-commerce sector has experienced remarkable growth, driven by increasing internet penetration and smartphone usage. The Economic Survey 2023-24 reveals that the country's internet user base has surged to 881.25 million as of September 2023
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. This digital transformation has led to a significant boost in online retail, with the Indian e-commerce market projected to reach $350 billion by 20302
.However, the survey also highlights emerging challenges that could impede this growth trajectory. Chief among these are data privacy issues and the rise of online frauds, which are becoming increasingly concerning for both consumers and businesses in the digital marketplace.
Data Privacy Concerns
The Economic Survey emphasizes the critical importance of data privacy in the e-commerce ecosystem. As online transactions increase, so does the volume of personal and financial data being shared across digital platforms. This has raised significant concerns about how this data is collected, stored, and used by e-commerce companies
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.The government recognizes the need for robust data protection measures to build trust among consumers and ensure the sustainable growth of the e-commerce sector. The implementation of comprehensive data privacy regulations is seen as crucial to address these concerns and create a secure online shopping environment.
Rising Online Frauds
Another major challenge identified by the Economic Survey is the increasing incidence of online frauds. As e-commerce transactions become more prevalent, cybercriminals are finding new ways to exploit vulnerabilities in digital payment systems and online platforms
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.These fraudulent activities not only result in financial losses for consumers and businesses but also erode trust in e-commerce platforms. The survey highlights the need for enhanced cybersecurity measures and consumer education to combat this growing threat.
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Government Initiatives and Future Outlook
In response to these challenges, the Indian government has been taking proactive steps to create a more secure and trustworthy e-commerce ecosystem. The Digital Personal Data Protection Act, 2023, is a significant move towards addressing data privacy concerns
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.The survey also mentions ongoing efforts to strengthen cybersecurity infrastructure and promote digital literacy among consumers. These initiatives aim to create a more resilient e-commerce sector that can continue to drive economic growth while protecting the interests of all stakeholders.
Despite these challenges, the Economic Survey maintains an optimistic outlook for India's e-commerce sector. With the right regulatory framework and technological advancements, the industry is expected to overcome these hurdles and realize its full potential in the coming years.
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