The days are passé when retail monoliths like Amazon and Walmart would dominate the world of e-commerce. The landscape of the online marketplace is widening beyond the duopoly of these two giants. A clutch of start-ups have tasted success in digital commerce. Governments, too, are getting into the groove amid the din of B2B e-commerce.
What can a government-backed e-marketplace contribute to the ecosystem? The entry of any government injects greater transparency and flattens the playing field. More strikingly, it transforms the business dynamics of procurement and delivery. Citizens get timely and quality goods and services. Time and costs mean much to any government, and digital transactions can save both. Plus, there is the democratization of opportunities with a government-owned e-commerce platform.
However, building an efficient and scalable e-commerce platform is challenging for any government to achieve on its own. This explains why governments worldwide are scouting for and stitching alliances with private players.
The Bricks Behind the Clicks – What’s behind the market boom?
In 2021, retail e-commerce sales amounted to approximately $5.2 trillion worldwide. This figure is forecast to grow by 56 percent over the following years, reaching about 8.1 trillion dollars by 2026 (Source: Statista). India is a flourishing market too, with e-commerce valued at $46.2 billion in 2020. It is expected to grow 18.29 percent to $136.47 billion by 2026. Emerging technologies are fueling the speed and scale of e-commerce platforms. The rollout of 5G technology has reduced the cost of data consumption for consumers. At the same time, the cloud has allowed companies to use enormous computing power at lower costs. The advancement of AI and Machine Learning (ML) has enabled mind-blowing analytic capabilities.
How governments have built e-commerce platforms
In India, Government e-Marketplace (GeM), a marquee initiative, has transformed the public procurement space over the last seven years. Since its launch, it has made significant progress toward achieving its three fundamental pillars: inclusion, transparency, and efficiency. GeM clocked an impressive Gross Merchandise Value of Rs 2 lakh crore in just eight months of 2023-24.
In Singapore, GeBIZ, the government's e-procurement platform has revolutionized public sector procurement in the country. It offers a comprehensive suite of services, including e-bidding, contract management, and online payment systems.
Africa is also making some good strides in e-commerce. In Senegal, the Ministry of Trade and SMEs is partnering with the private sector to facilitate the delivery of essential goods and services through e-commerce. As a landlocked country undergoing massive transformation, Rwanda increasingly attracts international attention for its innovative digital policies that create an enabling e-commerce environment.
Minding the Challenges
Resistance to change and organizational culture: One of the biggest challenges government-owned e-marketplaces face is the resistance to change within organizations. Resistance is inevitable when transformation is pitted against tradition. Government entities are often bound by established systems and a deep-rooted organizational culture that values familiarity over innovation.
Security and privacy concerns: We've all heard horror stories about data breaches and cyber-attacks. Government-owned e-marketplaces are not immune to such concerns. Governments must invest in the latest cybersecurity technologies and employ stringent protocols to protect businesses and individuals using their platforms.
Inadequate technological infrastructure: Inadequate technological infrastructure can impede the evolution of these platforms. Obsolete systems, slow internet speeds, and underdeveloped digital infrastructure can create bottlenecks and limit the potential of e-marketplaces to fully function and serve their intended purpose.
CSM Tech's readiness to build platforms for governments
A known GovTech pioneer, CSM Tech has an insuperable track record in designing and deploying disruptive tech solutions to government entities. Building on this deft expertise, we now position ourselves as a valuable player in the G2B (Government to Business) and B2G (Business to Government) e-commerce space. Our company has recently been a co-bidder alongside Africom Technologies for EthioPost's e-commerce foray. Ethio Post, Ethiopia's national postal service provider, is embracing e-commerce platforms to enhance agility in service and operations and digitally transform the whole gamut of services like pick-up and delivery options, payment solutions, and internet-based services. And we understand that there will be a swarm of opportunities in the near to foreseeable future.
Over 25 years in operations, we have taken a deep dive into government processes and workflows. Now, as we strategize to gain a foothold in the government-backed e-marketplaces, we are laser-focused on getting the hang of government procurement processes, identifying niche opportunities, ensuring regulatory compliance, augmenting integration capabilities, and doubling down efforts on security and data protection.
The future's in the big picture- jobs, economic growth and more
Forget the fear of AI stealing jobs and perish the thought of a robot as your overlord. Government-owned e-marketplaces have the potential to boost job creation and empower small and medium-sized enterprises (SMEs). These platforms enable SMEs to compete on a level playing field with more giant corporations by simplifying and democratizing the procurement process. Moreover, with the ability to monitor transactions, track performance, and enforce regulations, these platforms help eliminate corruption and ensure fair competition. This not only saves taxpayers' money but also promotes trust and confidence in government procurement processes. In the not-so-distant future, these platforms will improve agility and efficiency by embedding emerging technologies like AI, ML, and blockchain. The future belongs to government marketplaces, which regulate the least and provide the most.