The draft national e-commerce policy 2019 states that the e-commerce platforms use network effects and mining of unstructured data to create entry barriers. We argue that network effects alone do not create sustainable competitive advantage for the platforms. The added effect of the high customer switching costs creates a dominant position for the big firms. It is to be noted that their business models are not built around data. The provision of consumer data or the regulation of foreign participation in this space, does not translate into better business opportunities for micro, small and medium enterprises due to their small-scale operations. Rather, the big domestic retail players might take over and limit the opportunities.
