The revised e-commerce norms come in the backdrop of several complaints by traders and small and medium business owners on deep discounts offered by Flipkart and Amazon.
As govt tightens e-commerce norms, it is now a fair- level playing field for etailers.
No Exclusivity :
The new norms restrict on “exclusive deals” that many e-commerce marketplace platforms often run,
new brand launch or product launch, For example, Redmi exclusively available on Flipkart and such sales will no longer be able to see. This may affect badly on the revenue generation for ecommerce marketplaces.
No Preferential treatment :
An entity having equity participation by e-commerce marketplace entity or its group companies will not be permitted to sell its products.
Barring the sell of products by firms in which they own stakes could hit Amazon in particular, given that it has several such joint ventures, including Cloudtail and Appario.
As per previous updates, “In light of the deeming fiction, any sale beyond 25 percent from a single vendor will automatically be treated as inventory and thus be barred”
With this, e-commerce marketplace companies will now no longer be able to sell private labels, that is brands they directly or indirectly own, on their platforms.
No Deep Discounting
The government has also clarified that cash back discounts provided by e-commerce companies should be ‘fair and non-discriminatory’. There shall not be deep discounting.
The press note also makes clear that any services provided by an e-commerce marketplace entity should be “at arm’s length and in a fair and non-discriminatory manner”
“Cash back provided by group companies of marketplace entity to buyers shall be fair and non-discriminatory.”
This clearly says that there should not be any predatory pricing or loss funding. The game should fair enough for each player, whether it’s between Offline v/s Online or Online v/s Offline.
Share us your thoughts, will this hurt $18 billion ecommerce industry or It was required step to grow each player in the right direction.
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