The online shopping business in the country is going to change. After the new rules are implemented on the e-commerce companies, things like Exclusive Deal, Cashback and Bumper Discount will be over. The government has changed the policy of foreign direct investment for the e-commerce sector, where companies such as Amazon and Flipkart have suffered a major setback, there has been an attempt to calm the anger of the domestic businessmen, which are the ways in which these companies work Are upset with.
Rein on the unit connected to the platform.
A new rule has been added to the policy, according to which no unit connected to the e-commerce platform can sell the goods.
Luggage sales limit
With this, the limit of how much a vendor can sell on an e-commerce site has been set.
Cashback-Excluding Exclusive Sale
This will make the e-commerce sector companies change their business model. According to the new rules of government, an e-commerce platform can not give special concessions to any supplier. After this amendment, cashback, exclusive sale or launch of a brand on a portal, deals like Amazon Prime and Flipkart Assured, or any kind of special service can be difficult. The purpose of the new rules is to free these platforms from any kind of bias.
Cloudtail is seen by connecting Amazon and WS Retail to Flipkart, but due to the new rules, they will not be able to sell goods on related platforms. Walmart, the new owner of Flipkart, will not be able to sell the goods on this e-commerce platform itself.
‘Companies can not influence prices’
On the change in policy, a senior government official said, “This step has been taken to implement the things that were said in the press note 3 of 2016.” It was said that e-commerce platforms can not effect prices directly or indirectly. The official said that on behalf of the associate units of e-commerce platforms, there was a lot of complaints about discounts. They told that they were giving these exemptions through logistics and wholesale entity.
Big discount, not good for physical stores
This also means that now customers will not get big discounts on e-commerce sites like before. With this, physical stores can benefit, whose businesses have made a big dent in e-commerce companies. The business community was constantly complaining that e-commerce companies are affecting the market by selling goods on their platform. According to them, it was also against the rules of FDI, in which there is a ban on such investment in business-to-consumer e-commerce.
New rules from February 1, 2019
However, in the business-to-business e-commerce, the government has allowed 100% FDI. Information about changes in e-commerce policy has been given by the Department of Industrial Policy and Promotion (DIPP) in a press release. He said that the new rules will come into force from February 1, 2019. The government is also working on a separate e-commerce policy, for which the discussions between the ministries have started.
CloudTail’s sale on Flipkart
One source, who understood investment matters about the new changes, said, “Now CloudTail will not be able to sell goods at Amazon. It can not be preferred even in warehouse or logistics matters. Amazon currently sells the most stuff on Amazon, which is a joint venture between Infosys co-founder NR Narayana Murthy’s Catamaran Venture and Amazon.
Inventory conditions strict
Another change has made inventory conditions strict. It states that if a vendor buys more than 25 percent of the marketplace entity from its market entity or its group companies then it will be considered that the marketplace control is on its inventory. This means that a brand or supplier will not be able to make a special relationship with one of the marketplaces. This is seen in cases of mobile phones or white goods. According to the new policy, an entity with equity or common control in the marketplace or directly or indirectly must serve the vendors of the platform without prejudice. This can affect promotional schemes like cashback or fast delivery. They are considered discriminant in the new policy.
‘Equals will get chance’
About these changes PWC’s partner Akash Gupta said that they will get equal opportunity for them. It also gives new vendors a chance to emerge in the market. Gupta said, “There have been some such changes, whose monitoring can be difficult.”
Merchant will be happy
Confederation of All India Traders (CAT), a merchant company, welcomed the government’s decision to tighten the rules related to the sale of products by e-commerce companies. However, CAT has also demanded to bring an e-commerce policy and make regulatory for monitoring the area.
CAT’s general secretary Praveen Khandelwal said, “It is a great achievement after our long-standing struggle. If it is implemented properly, then e-commerce companies will be able to control the disturbances, market spoiler prices and huge discounts etc. ”