Thursday 9 December 2021
- Advertisement -
HomeEconomyBusinessGoods on Amazon, Flipkart, other e-commerce sites to get costly due to...

Goods on Amazon, Flipkart, other e-commerce sites to get costly due to new rules

The government's idea of promotion of local goods is good for Made-in-India products but not for the platforms, said an industry insider

New Indian e-commerce rules will raise costs of goods for all online retailers but particularly Amazon and Walmart’s Flipkart as they may have to review their business structures, senior industry sources said. The additional cost is likely to be passed on to the consumers, industry sources said.

In an anti-consumer but pro-domestic trader move, the Union Ministry of Consumer Affairs outlined plans on 21 June, which include limiting “flash sales” of goods by online retailers, reining in a private label push, compelling them to appoint compliance officers and impose a “fall-back liability” if a seller is negligent.

The new rules, made allegedly under the pressure of domestic traders, are expected to have an impact across the board in an e- market India forecasts will be worth $ 200 billion by 2026, hitting players including Tata’s BigBasket, Reliance Industries’ JioMart, Softbank-backed Snapdeal and market leaders Amazon and Flipkart.

The rules are the latest in a growing confrontation between American tech giants and New Delhi over a host of policy-related issues, which are seen by some as protectionist. “The rules will have a wider impact on all forms of e-commerce and will increase business costs. Entities, even beyond big players, are analysing the policy and will share concerns with the government,” Arjun Sinha, a partner at Indian law firm AP & Partners, said.

The companies have until 6 July to respond to the proposals, after which time they may be reviewed further or implemented.

Snapdeal said it was reviewing the rules. BigBasket declined to comment. Reliance did not respond to a request for comment.

One aspect of the proposed new rules for selling goods online that, some believe, will have a particular impact is one that gives the customer “suggestions of alternatives to ensure a fair opportunity for domestic goods” if a retailer is showing imported goods for sale. But this should not be a problem for e-commerce sites that have been showing such comparisons with nearly all products in their mobile applications as well as websites.

“The concept is about promotion of local goods. It’s good for Made-in-India products, but not for the platforms,” said Salman Waris, a partner at TechLegis Advocates.

Non-compliance with the rules, if implemented, could be punishable with prison terms, and fines of at least Rs 25,000 under India’s consumer law, Waris added.

Govt says they’re ‘cheating’

Monday’s Indian government notification detailing the rules said that they issued the rules after complaints of “widespread cheating and unfair trade practices being observed in the e-commerce ecosystem.” It did not name any company.

The rules potentially present a bigger setback for Flipkart and Amazon, as they contain clauses that say e-commerce firms must ensure none of their related enterprises is listed as a seller on their shopping websites, and that no affiliate entity should sell goods to an online seller operating on its platform. Amazon holds an indirect stake in two of its top sellers.

Indian retailers allege that Amazon and Flipkart use their wholesale units to indirectly list products on their websites through select sellers, bypassing foreign investment restrictions that prohibit direct sales. Both companies deny any wrongdoing.

Amazon and Flipkart are likely to push back against the proposals, two of the industry sources said.

The rules were seen by some in the industry as a government alternative to a more stringent version of its foreign investment law, which restricts business arrangements Flipkart or Amazon can have with sellers, the sources said.

“The Consumer Affairs ministry has nothing to do with issues brought under these rules,” one e-commerce executive said.

Amazon said in a statement that online marketplaces promote competition and enable transparency, adding that it was reviewing the draft policy and it was too early to comment.

Flipkart did not respond to a request for comment.

A Reuters investigation in February cited Amazon documents that showed it gave preferential treatment to a small number of its sellers and used them to bypass federal law, sparking calls for a against the company. Amazon has said it does not give favourable treatment to any seller.

Editor’s note: It is not clear why, if the Indian traders believe Amazon, Flipkart, etc are cheating by in-sourcing goods, the government does not allow them to in-source goods too — so that they can offer the products as cheap and remain in the competition. Quite a few of the Indian companies named in the report above have subsidiaries, sister concerns and other capacities that enable them to play the same game in the market.

101 views
Reutershttps://www.sirfnews.com/
Reuters is an international news organization owned by Thomson Reuters. It employs some 2,500 journalists and 600 photojournalists in about 200 locations worldwide. The agency was established in London in 1851 by the German-born Paul Reuter. It was acquired by the Thomson Corporation in 2008 and now makes up the media division of Thomson Reuters.

Sirf News needs to recruit journalists in large numbers to increase the volume of its reports and articles to at least 100 a day, which will make us mainstream, which is necessary to challenge the anti-India discourse by established media houses. Besides there are monthly liabilities like the subscription fees of news agencies, the cost of a dedicated server, office maintenance, marketing expenses, etc. Donation is our only source of income. Please serve the cause of the nation by donating generously.

Support pro-India journalism by donating

via UPI to surajit.dasgupta@icici or

via PayTM to 9650444033@paytm

via Phone Pe to 9650444033@ibl

via Google Pay to dasgupta.surajit@okicici

Rajasthan | 4 school girls file complaint against school teachers alleging gang rape and molestation in Bhiwadi, Alwar district

We've registered the case and are investigating the matter thoroughly: Bhiwadi Superintendent of Police Ram Moorty Joshy (08.12)

An Incan Nobleman Contested Spanish History https://daily.jstor.org/how-an-incan-nobleman-contested-spanish-history/

Montana's governor is seeking to end protections for some grizzlies, a move that — if approved by federal officials — could allow hunting of the bears for the first time in decades. https://cnn.it/3duMRLE

#Twitter Acquires Quill; Will Shut Down Service at the End of the Week https://daringfireball.net/linked/2021/12/08/twitter-quill-shutdown

#US President #JoeBiden has signed an executive order that requires the federal government to achieve a goal of net-zero #carbon_emissions by 2050. The order directs the government to use its scale and procurement power to achieve 100 pc carbon pollution-free electricity by 2030.

Read further:
Reutershttps://www.sirfnews.com/
Reuters is an international news organization owned by Thomson Reuters. It employs some 2,500 journalists and 600 photojournalists in about 200 locations worldwide. The agency was established in London in 1851 by the German-born Paul Reuter. It was acquired by the Thomson Corporation in 2008 and now makes up the media division of Thomson Reuters.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisment -

Now

Columns

[prisna-google-website-translator]
%d bloggers like this: