Recent announcement on the new proposed e-commerce policy, which the Indian government has been working on after consulting the different experts and stakeholders. Finally, it came before the audience last week. It was discussed in the inter ministerial meeting at the said date. This has brought forth the rapid internet penetration at low cost data with the access of smartphones and other similar devices. This has helped in boosting up the adoption of e-commerce in India that will invite more Indians to be online. This policy on E-Commerce may be unofficial at the moment, but soon it is going to roll out soon.
Let’s check the impact and the way it will have issues before the booming online commerce in the ecom space going forward. In this draft, the government is seen talking about the marketplaces that fail to be partial to any of its sellers. Perhaps, this is not the first time when the government has tried to poke its nose. Earlier in 2018, a similar attempt was made in this direction. After the divide of Amazon and Flipkart, one can find their ownership structure to be rejigged in the market. In 2019 February, we saw Catamaran Ventures to be raising its stake in Cloudtail’s parent company Prione Business Services.
This very move slashed down Amazon Asia’s stake in Cloudtail to around 24% from the earlier 49% with the rising stake of Catamaran Ventures’ stake went to soar rising to 76 percent from 51 percent earlier. With this, Cloudtail was able to cease to be an Amazon group company, which ended up making it compliant with the rules. Now, we see Flipkart recently sharing the preferred sellers coming to procure the different products directly from the suppliers as against the current model where one can see the entire unit of Flipkart selling their products.
There are many traders who are seen alleging the fact that marketplaces are seen using the customer data they tend to get with the help of selling away the third party products to their own benefit by launching label products. With the help of addressing this very issue, the draft is seen specializing in the marketplace that helps in getting all the information to move along with the benefits of the sellers in their own platform. The details are yet to be brought forth, but the government is hell bent on implementing the same.
With these restrictions coming to place for e-commerce giants like Amazon and Flipkart, one can see the repercussions reaching to their partner companies and associates as well. It also indicated that the company will be updating time and again about the right kind of structure, which the companies have to adopt. This is the first time when the draft from Indian government talks about preventing the use of technology in order to attract their preferred vendors. The next big thing is cracking down on algorithms. This is also the first time when the government is thinking of putting too much stress on the fact that the E-Commerce companies are not going to use technology in the form of algorithms in their promotion or business to attract both the vendors and consumers.