Controlling E-Commerce-India’s E-Commerce policy-Positive and Negative Impacts
India is a booming 2.8 Lakhs crore E-commerce market; Giants like Amazon, Flipkart, Paytm Mall etc all have a booming business in every fiscal year
India is a booming 2.8 Lakhs crore E-commerce market; Giants like Amazon, Flipkart, Paytm Mall etc all have a booming business in every fiscal year, and this boom is observed due to more and more increasing connectivity around the country, excellent offers and product placement strategy practiced by e-commerce companies and popularity between people through different medias.
On Feb 28, 2019, Modi Government released a Draft E-commerce Policy. The draft is intended to bring about changes in the booming Rs. 2.8 Lakh crore E-commerce industries. The changes have come into existence to keep a stricter check on the E-Commerce industry, which was till now running wild without proper regulations. Traditional retailer (brick-and-mortar retailers) has been opposing online shopping portals for violating competition norms, predatory pricing, etc.
Key changes affected by E-commerce policy
- Data-The draft bars retailers in the country from allowing data access to foreign businesses even with the consent of the user. Currently, data gathered by e-commerce companies in the country is stored on the private cloud storage capacities outside India for financial reasons. Due to this, companies like Amazon and Flipkart will have to undergo major restructuring processes. Further, the policy states that every big corporate should share the data with smaller companies
- Anti-Piracy and Anti-Counterfeiting-It suggests that online retailers must publicly share all relevant details of the sellers listed on their portals. Online retailers must display phone numbers and email addresses for consumer grievances and offer a primary solution to each problem within a week.
- Unauthorized E-Commerce Websites-The new draft policy comes down heavily on unauthorized e-commerce websites, especially Chinese firms such as Shein, Romwe and Club Factory. These firms have been found to be misusing the “Gifting” route to avoid customs duty and GST. All these websites are abided to go through customs for shipments.
Impacts on the E-Commerce industry
- With the stringent regulations, some of the companies will have to go through a major restructuring to comply with the norms fully, restricting can be a very hectic and time taking, and also it will take lot of money in compiling all the norms.
- Shifting data storage from foreign locations to India will be expensive and time-consuming for the firms. More Investments will have to flow in for this transition.
- To comply with the anti-piracy and anti-counterfeiting norms, more paperwork and legal hassle will take place. Chinese companies will be the worst hit group by these norms due to mal-practices and misuse of the current norms.
- Practices like cheap and predatory pricing, flash sales, high-inventory buying, etc. will be watered down, providing a fair chance to offline traders.
- Some say that the norms might even force some companies to exit the Indian market, which will lead to fewer competitions between e-commerce companies and also fewer options between customers.
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