What 100 per cent FDI in marketplace model spell for eComm companies?

While some believe that restructuring of eComm business models will take time, malls happy as GPI clears ambiguity.
100 % FDI for eCommerce companies

While some believe that restructuring of eComm business models will take time, malls happy as GPI clears ambiguity.

Any industry when at its nascent stage, needs lot of money and control over products and services provided. eCommerce is in that stage. With 100 per cent FDI only on marketplaces (with the riders mentioned by the govt.) will push all eCommerce players to adopt the marketplace or P2P model (investors will also push the entrepreneurs) which might or might not work for many companies and might blow up on the face later, believe many Indian firms.

Marketplace scalable, but time consuming
“Moving towards a market place model, might be efficient and scalable for all of us, but it will take time to reach there and we must be given the space and time to grow, evolve and get there. Many of our eCommerce companies are going through a very crucial phase and a stiff competition and this only going to prove to be a disadvantage for our home-grown companies. And I can say, this regulation is not very postive for our model (rental) at all,” said Sahyujyah Srinivas, CEO and Founder, LibeRent.com.

100 per cent FDI will structure retail ecosystem
It is a positive move by GOI leading to making the entire retail ecosystem more competitive, say many a players in the industry. “The move will only benefit the entire retail ecosystem in India and make it more competitive. The policy change has opened the flood gates for established foreign eCommerce companies to enter the country and this will compel Indian eCommerce companies to rework their business models and do away with deep discounting strategy that they been doing for a while now. I think the policy change will revamp some percentage of the online consumers’ buying behaviour and drive them back to malls and high street shopping that provide a unique experience that is missing when one does shopping online,” said Pushpa Bector, Executive Vice President and Head, DLF Mall of India.

“100 per cent FDI in marketplaces is great as it gives eCommerce players a kosher way to structure their companies in India. This policy is going to benefit brands such as Tailorman, as discount seeking customers will now shift focus towards quality, trust and customer experience,” said Vidya Nataraj, co-founder at Tailorman.

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