Chennai: E-commerce firms and trade groups appreciated the new rules for the sector, noting that the norms would help create level playing for all sellers.
But small vendors are a worried lot over the condition on vendors to sell only 25 per cent of their products through an e-commerce platform.
Commending the new guidelines, Snapdeal founder and CEO, Kunal Bahl, in a tweet said, “Snapdeal welcomes updates to FDI policy on e-commerce. Marketplaces are meant for genuine, independent sellers, many of whom are MSMEs. These changes will enable a level playing field for all sellers, helping them leverage the reach of e-commerce.”
While there was no comment from Flipkart, e-commerce firm Amazon India said, “We are evaluating the circular.”
Traders’ body CAIT, said, “It is a big achievement after a long struggle. If it is implemented in proper spirit, mal-practices and predatory pricing policy and deep discounting of e-commerce players will be a matter of past.”
The monitoring and compliance mechanism of the new policy has been questioned by All India Online Vendors Association as the existing policy already bars e-commerce companies with foreign ownership from selling its own inventories and influencing pricing of products on its platform.
“Instead of investigating violations by particular companies in existing Press Note 3/2016, government has washed their past sins and formed new policy. It will be years before government investigates or penalises them. Now this compliance is conveniently postponed to september 2019,” a spokesperson of All India Online Vendors Association said.
Small and medium-sized vendors appreciated the norm barring e-commerce firms from discrimination among vendors in any form but questioned the feasibility of its implementation by platforms.
Children accessories maker Nappy Monster’s co-founder Sumantha Rathore said, ‘Small vendors like us will need to enhance production capacity, investment in inventories to meet the requirement. With 25 per cent sale restriction, a small handicraft vendor selling 1,000 units through a nice commerce platform will need to invest in inventory to produce 4,000 units. This will deter entrepreneurship that e-commerce firms have created by blocking capital.’
The revised norms are aimed at protecting the interest of domestic players, who have to face tough competition from e-retailers having deep pockets from foreign investors, according to the ministry of commerce and industry.
The policy would be effective from February 2019. Traders body CAIT said if the steps are implemented in proper spirit, mal-practices and predatory pricing policy and deep discounting of e-commerce players will be a matter of past.