The meeting conducted by Commerce and Industry Minister Nirmala Sitharaman earlier this week is set to bring a lot of changes in the ecommerce industry. After a positive dialogue on bringing in FDI in B2C ecommerce businesses in the meeting, issues related online retailers’ business practices were in the spotlight.
Retailers Association of India (RAI) believes that there is severe disparity between offline and online retailers, with scales in the favour of etailers. For the same RAI moved to High Court demanding equal terms and conditions for both, offline and online channels. As a result of which high court asked the government to look into this matter and finally the issue was discussed in the abovementioned meeting held by Ministry of Commerce & Industry.
Arvind Singhal, Chairman, Technopak Advisors said, “Any business dealing with consumers directly need to be brought under consumer protection act and if there are any anti-competitive practice, they should face the CCI (Competition Commission of India). Government should move with time and abolish any distinction between physical and digital retailers.”
So far big ecommerce companies like Flipkart, Snapdeal and Amazon call themselves marketplaces and thus have managed to duck away from regular rules and regulations that a retailer is subjected to. This might stop now. RAI insists that etailers indulge in standard retail activity but call themselves marketplace by using a loophole to their advantage. And government is paying heed to this argument
Several banks, government officials and managers of offline as well online retail businesses are participating in this discussion to understand what should be an ideal & fair retail practice. Although it’s clear that protecting interest of consumers and competitors (traditional retailers) and bringing uniformity is going to be the top priority. The demand is to penalise those found flouting rules and offering predatory price under Consumer Protection Act and face the Competition Commission of India.
This can be bad news for etailers because as it is none of them is making profit. They all just burning VC funds to stay afloat. But it’s good news for sellers who were coerced to sell their products below the cost of production in order to match up the dominant players. It will also help to bring transparency in this hazy world of ecommerce.
Editor team is specialized in introducing the marketplace content targeting the Indian online sellers. They plan and coordinate to bring the appealing content for the small businesses on how to partner with the e-commerce sites like Amazon and Flipkart and strategies for improving their online business.
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