E-commerce business in India is going to surpass a Hundred billion dollars per year mark by 2022. Now, that's a lot of money. And foreign companies are looking forward to taking whatever it can, from the feast. But, Indian Govt is not in the mood to let them enjoy their meal. The new law made by Indian Govt is going to prove a pebble in the shoes.
There are three main points in the policy that can affect big E-commerce companies from outside (majoritarily Amazon and Walmart) :
• A ban on exclusive sales
• Outlawing of the retailer selling products on platforms which Govt count as investors
• Restrictions on discounts and cash back
The new policy is going to be implemented from Feb 1, 2019.
Local-Offline business has been complaining for past time on how Amazon and Flipkart are forcing companies to launch their products exclusively on their website, which hurt the local market (the biggest example of which is Xiomi phones). After implementation of the new policy, Companies will be denied permission from selling more than a quarter of their products from a single E-commerce platform.
Both the companies, Amazon and Flipkart are tying up with different brands for exclusive online sales (Including Oppo, Vivo, One plus T and Xiomi). This will affect the E-commerce company Flipkart most, as the American Company Walmart has bought more than half of its share for more than 16 billion dollars, seeing the future opportunities in Indian Markets.
The new policy says:
E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain the level playing field…
Cash back provided by group companies of marketplace entity to buyers shall be fair and non-discriminatory.
Kunal Bahl, the co-founder and CEO of Snapdeal welcomed the new policy by a tweet:
<blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">.<a href="https://twitter.com/snapdeal?ref_src=twsrc%5Etfw">@Snapdeal</a> welcomes updates to FDI policy on e-commerce. Marketplaces are meant for genuine, independent sellers, many of whom are MSMEs. These changes will enable a level playing field for all sellers, helping them leverage the reach of e-commerce. <a href="https://twitter.com/rabhishek1982?ref_src=twsrc%5Etfw">@rabhishek1982</a> <a href="https://twitter.com/DIPPGOI?ref_src=twsrc%5Etfw">@DIPPGOI</a> <a href="https://t.co/tWojv3gXA7">https://t.co/tWojv3gXA7</a></p>— Kunal Bahl (@1kunalbahl) <a href="https://twitter.com/1kunalbahl/status/1077925752090300416?ref_src=twsrc%5Etfw">December 26, 2018</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>