New e-commerce rules – Are there no more online shopping days ahead?

In an effort to make online retailing a fair platform for all e-commerce firms, the government on Wednesday, brought in new, strict guidelines. Barring online sellers including Amazon and Flipkart from selling exclusive-only products, the rules aim at prohibiting the practice of controlling product prices, thereby cutting off on exclusive offers and discounts.

The instructions also stated that e-commerce companies cannot sell products of the companies they have stakes in, tightening the grip on Foreign Direct Investment (FDI). Small vendors however, have taken a serious blow with the government’s condition of selling only 25 per cent of their inventories online.

Taking the decision in positive light, Snapdeal founder and CEO Kunal Bahl tweeted, “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 Flipkart did not release a statement, Amazon India said, “We are evaluating the circular“.

Alongside mixed reactions from online marketplaces, the All India Online Vendors Association has strongly condemned the notion of stricter rules. “Instead of investigating violations by particular companies in existing Press Note 3/2016, the government has washed their past sins and formed a new policy. It will be years before the government investigates or penalizes them. Now this compliance is conveniently postponed to September 2019,” a spokesperson of All India Online Vendors Association told The Week.

Amidst all the uproar and voicing of opinions from vendors and different associations, what lurks in the dark is another question. What about the buyer?

The unique selling point of online shopping was the vast variety, abundance to choose from, and heavy discounts. Special offers available exclusively on one website were the driving factors behind multiple flash sales that witnessed products being sold in minutes. With new guidelines in place, it is possible that the buyers start to feel less privileged.

Talking about cash backs, which play a momentous role in motivating the buyers to shop online, the new policy revealed they should be “fair and non-discriminatory”. This would possibly mean that generous cashbacks are now a thing of the past.

The policy, which will come into effect on February 1, 2019 can potentially change India’s online shopping landscape. With hazy indications towards a decrease in buyer-oriented policies, it is possible for the market to shrink. However, the argument that an unbiased division of power amongst all e-commerce platforms might keep drawing more buyers with time cannot be ruled out.