5 things to know about new ecommerce policy
The government has tightened guidelines for FDI in e-commerce market places, barring players, including Amazon and Flipkart, from selling exclusive-only products on their platform.BY Indian Retailer Bureau | Dec 27, 2018 | comments ( 0 ) |
No to steep discounting
As per the new guidelines for Foreign Direct Investment on e-commerce sector, e-commerce market places such as Flipkart, Amazon amongst others are no longer be allowed to influence the sale price of goods or service directly or indirectly in order to maintain level playing field.
“Services should be provided by e-commerce marketplace entity or other entities in which e-commerce marketplace entity has direct or indirect equity participation or common control, to vendors on the platforms at arm’s length and in a fair and non discriminatory manner. Such services will include but not limited to fulfillment, logistics, warehousing, advertisement/marketing, payments, financing etc,” as per the statement issued by DIPP.
Cash back provided by group companies of marketplace entity to buyers shall be fair and non discriminatory. For the purposes of this clause, provision of services to any vendor on such terms which are not available to other vendors in similar circumstances will be deemed unfair and discriminatory. Moreover, ecommerce marketplace cannot mandate any seller to sell any product exclusively on its platform only.
Accountability to sellers
Sellers will be accountable for warrantee/ guarantee of products sold via marketplace. It has become mandatory for marketplace to provide name, address and other contact details of the seller to customer. All postsale activities will be the responsibility of sellers’ right from delivery of goods to the customers and customer satisfaction. Marketplaces are permitted to enter into transactions with registered sellers, that too only on B2B basis.
As per the information published on DIPP’s website, now onwards ecommerce companies will be required to furnish a certificate along with a report of statutory auditor to Reserve Bank of India, confirming compliance of guidelines, by 30th September of every year for the preceding financial year. The rule will be in effect from February 2019.
Subject to the conditions of FDI Policy on services sector and applicable laws/regulations, security and other conditionalities, sale of service through e-commerce will be under automatic route.
No control over inventory
As per new DIPP rule, e-commerce marketplaces cannot own or control the inventory i.e goods purported to be sold. Such an ownership or control over the inventory will render the business into inventory based model( FDI is not allowed in inventory model). Inventory of the vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25% of purchases of such vendors are from the marketplace entity or its group companies.
Moreover, equity holder e-commerce market places or its group companies, or having control on its inventory by e-commerce marketplace entity or group company are not allowed to sell its products on the platform run by such marketplace entity.
E-commerce marketplaces can initiate payments for sale in conformity with the guidelines of the Reserve Bank of India.
CAIT accuses Flipkart for
CAIT has reached to the DIPP post an advertisement in newspapers announcing the sale of an item
Amazon Tatkal: an
It was today that E-commerce giant Amazon announced the launch of 'Amazon Tatkal', an initiative
- Food & Grocery
Flipkart launches grocery
As grocery delivery has been the talk of the town lately, eCommerce giant Flipkart has too entered
RBI permits banks-eComm
Now banks can jointly venture with eCommerce players with RBIís permission.
Flipkart shrinks product
The ongoing no-question-asked return policy adopted by the eCommerce fraternity has caused a lot of
- Stock Watch
Snapdeal achieves three
Snapdeal has increased the number of sellers on its platform since the past one year to more than