Economist 3/4/16

  1. By 2030 more than 1 billion Indians will be online. In June last year one in four mobiles used in India was a smartphone, up from one in five just six months earlier.Sales are still tiny, at $16 billion last year, but the country is the world’s fastest-growing e-commerce market and is prized by America’s and China’s internet titans. India has become the biggest test of Amazon’s international ambitions. Jeff Bezos, Amazon’s founder, wants it to be his second-largest market, after America.Indian e-commerce has such potential because it can bring three changes more profound than convenience and keen prices. The first is faster financial development. China already provides one example. Alipay, an arm of Alibaba, overcomes mistrust between buyers and sellers by holding on to customers’ money until they have safely received their goods.The torrent of information that Alibaba gathered on merchants and consumers was the basis for a lending business.
  2. Paytm, which provides digital wallets and is itself backed by Ant Financial, has 120m accounts, nearly six times the number of credit cards in India. E-commerce companies are also helping small businesses obtain loans that they would otherwise have struggled to raise.Second, e-commerce firms could help overcome India’s ropy infrastructure and vast geography. Where roads are clogged and infrastructure is decrepit, the rival firms are melding warehouses and local outposts into idiosyncratic distribution networks.Alibaba is connecting remote rural areas to the online economy; there are now 780 “Taobao villages”, rural communities in which at least 10% of households are shopping or selling over the internet.The third big impact of e-commerce in India is on retailing itself. Shopping malls and chain stores account for only about one-tenth of total retail sales. Already, the combined sales of India’s top three e-commerce sites, Flipkart, Snapdeal and Amazon, surpass those of the ten largest offline retailers.
  3. Two-thirds of Indians are below the age of 35.In 2014 only America, Britain and Israel saw more new tech startups.The market in China had a very different starting-point, for instance. When the likes of Alibaba got going, it helped that China was already home to many manufacturers looking for new ways to sell excess inventory. India’s manufacturing base is much smaller, especially for electronics, e-commerce’s best-selling category. India is also poorer. A smaller share of its population is online—32% last year, compared with 52% in China. Indians speak more than 20 languages, which complicates marketing.
  4. LAST week Kayak, a search engine for travel, caused a minor kerfuffle when it released the results of a survey examining the price of in-flight refreshments offered by budget British airlines. The survey found price hikes that ran to hundreds or even thousands of percent.Ryanair, often the pantomime budget-airline baddie in these kinds of discussions, was a key offender. They demanded the highest prices for three of the items surveyed; their mark-up on water, for example, was more than 1,300%.There are few markets more captured than a small cabin 30,000 feet in the air.And many flyers actually want to spend money, either in a rush of excitement at the start of their trip or as an excuse to offload unused foreign currency at the end.. Kayak’s study compared some prices to budget bulk-buy packs in supermarkets, so some of their base prices seem excessively cheap.
  5. TO MARK the United Nations’ International Women’s Day on March 8th, we present our “glass-ceiling index” which aims to reveal where women have the best chances of equal treatment at work. It combines data on higher education, labour-force participation, pay, child-care costs, maternity rights, business-school applications and representation in senior jobs.Unsurprisingly, the Nordic countries—Iceland (a newcomer to our index), Norway, Sweden and Finland—come out top overall. In these countries, women are present in the labour force at similar rates to men. Finland has the largest share of women who have gone through higher education compared with men (49% of women have a tertiary degree, and 35% of men). Norway’s gender wage-gap (6.3%) is less than half the OECD average (15.5%).Women have 44% of seats on listed-company boards in Iceland; strong representation in Scandinavian boardrooms is common thanks to quotas. Norway and Iceland also have voluntary political-party quotas, as does Sweden where 44% of parliamentary seats are occupied by women, one of the highest rates in the world. Hungary ranks fifth, having the lowest gender wage gap, of 3.8%.Hungary has generous paid leave for mothers (71 weeks at 100% of recent pay) and low child-care costs. At the bottom of the ranking are Japan, Turkey and South Korea, where men are more likely than women to have degrees, to be in the workplace and to hold senior positions. Their pay gap is also wide.

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