The Modi government on Tuesday allowed 100%
What happened next is stuff of legends. Offline brand CEOs and some consultants spoke up about how this will herald in a ‘level playing field’, ‘a transformation’ and a ‘new lease of life’.
Some e-commerce companies did send quotes yesterday night. Interestingly the who’s who of e-commerce (you know who) are still quiet. We reached out to
Now, the defining question really is…
We dialed in a few consultants to understand what the policy might mean for the industry, and for consumers.
The Fight >>>
"It could be even a blessing in disguise for online companies as they no longer will have to burn cash to acquire customers",
Vs.
“It’s no business of the govt. to comment on the discounting part of it. Let the CCI (Competition Commission of India) prove it’s harming the sector. Some of these clauses are bordering on being ridiculous”, Arvind Singhal, Chairman and Managing Director of Technopak told BI.
Note: The govt.’s independent arm CCI ruled around 6 months back that there is no damage being done by the pricing of online players.
Is this the end of the likes of the Big Billion Day Sale?
Discounting will continue, but from the sellers’ end. E-commerce is fundamentally more efficient than
Anyway, how does the govt. figure where to stop? Is 5% discount too much or 50%?
The Flipkarts and Snapdeals will be busted, huh?
If discounting is stopped, the growth in e-commerce will shrink.
The big investors won’t take this lying down.
So VC money will dry out? L (Please say no)
Gosh, that’s drying up because there were far too many startups with no viable business models.
There will be no issues in raising money. There are significant growth opportunities for the right players.
What now?
E-commerce players have to be figure out more efficient supply chains.
Will inventory-based models be affected?
You can stock in your supplier’s account, and not your own.
You deliver directly to the buyer. It’s as good an inventory model as anything else.
With the 25% revenue cap, will a Flipkart or
Not at all. That’s the case with group companies only. As far as pure marketplaces and inventory-based marketplaces (like Lenskart/Urban Ladder) are concerned, the policy doesn’t apply. There are no significant restrictions.
The policy only confuses the issue, much like the multi-brand retail policy. There would be clarifications from the govt. within a few weeks, or a month.
What about the consumer experience bit?
The policy shifts the liability to the seller. That’s absurd.
If you buy a Colgate toothpaste off a Kirana, or a pair of Lee jeans off Shoppers Stop, and it turns out to be defective, do you approach the kirana/store, or the brand? The kirana/store owner sorts it out with the supplier, right?
It’s an Amazon/Flipkart/Snapdeal’s job to get good sellers onboard, and offer replacement if they’re letting people sell through their platform.
Will there be limits to the number of units you can buy at the next
Nothing will change. Chill.
So I did.
Image credit: Indiatimes