Best printers for Home

Best Mixer Grinder

Best wired Earphones

Best 43 Inch TV in India

Best Wi Fi Routers

Best Home Theatre in India

Smart Watch under 5000

Best Laptops for Education

Best Laptop for Students

<ul><li>India has reportedly decided to not participate in the e-commerce discussions with the World Trade Organisation (WTO) scheduled to begin in March. </li><li>India is concerned about the proposed custom duties of electronic transmissions. </li><li>India’s own draft e-commerce policy that was released on Saturday could help strengthen the opposition against the WTO’s e-commerce rules.</li></ul>India won’t be participating in the World Trade Organization (WTO) talks on e-commerce next month because of concerns over unfair market access to foreign players. India also just came out with its own draft of the e-commerce policy on Saturday, but its main concern with WTO is the proposed custom duties on electronic transmissions. A commerce department official <a href="https://www.business-standard.com/article/economy-policy/india-refuses-to-join-e-commerce-talks-at-wto-says-rules-to-hurt-country-119022500014_1.html">told</a> Business Standard, “WTO rules come into effect for all 164 members and need to be ratified by each, but for the first time a major decision has been taken without complete consensus among member nations. We will not encourage a multilateral platform to run, based on the interests of a few nations. Our policy will deal with concerns such as cross-border data flow.” Most global e-commerce players haven’t been too subtle about the fact that India is a ‘strategic market’ for them. India claims the new rules put forth by the WTO could provide unfair market access to foreign companies, something they’ve been working hard to deter despite opening the Foreign Direct Investment (FDI) pipelines. Tax on tax The draft e-commerce policy that the Indian government put out on Saturday favours not imposing any customs duties on electronic transmissions — basically any type of digital trade — which is in contradiction to the WTO’s e-commerce policy. 
 
 
 
 
 <div type="ExtQuote" text="“With increasing digitisation, more and more products such as books, music, films, video games, etc. are being traded electronically. By agreeing to the permanent moratorium, countries with tariff schedules, which allow putting duties on these kinds of products, will give up these rights and lose revenues.”" auname="India’s draft e-commerce policy"></div>









 Even developed nations like the US have called for “non-discrimination in treatment of digital products” since it is “at the core of the digital trading system.” Other developed nations likes the Singapore and South Korea are also propagating that custom duties should not be imposed on the transaction of digital products. On the other hand, China is in favour of the deal, according to officials. They told Business Standard that Alibaba, the Chinese multinational conglomerate, has partnered with the WTO and the World Economic Forum (WEF) to create an Electronic World Trade Platform (eWTP). While data is at the heart of India’s new e-commerce, it can help India’s cause at the WTO by strengthening the opposition. See also: <a href="https://www.businessinsider.in/amazon-india-finds-way-around-new-e-commerce-rules-for-cloudtail-and-appario/articleshow/67831376.cms">Amazon may have found a way around India’s new e-commerce rules</a> <a href="https://www.businessinsider.in/e-commerce-wars-amazons-jeff-bezos-vs-mukesh-ambani-in-india/articleshow/67620116.cms">Amazon's newest challenger may be the richest man in Asia</a> <a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms">Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart</a>

India decides to opt-out of WTO e-commerce talks over digital tax concerns: Report

Ambani vs Amazon

<ul><li>Morgan Stanley has warned that Walmart may exit from Flipkart. </li><li>India’s new e-commerce rule brought in tighter FDI guidelines in order to boost Indian marketplaces. </li><li>Under new rules, Flipkart will have to do away with 25% of its products on the platform.</li></ul>Walmart’s biggest ever deal in history could soon be a thing of the past. Walmart’s acquisition of Indian unicorn Flipkart for $16 billion was one of the world’s biggest e-commerce deals. It now stands in jeopardy as the retail giant could make an exit from Flipkart in the wake of India’s <keyword id="7170085" type="UNKNOWN" weightage="20" keywordseo="new-e-commerce-rules">new e-commerce rules</keyword>, according to a report by <a href="https://economictimes.indiatimes.com/industry/services/retail/morgan-stanley-warns-walmart-may-exit-flipkart-post-new-fdi-rules/articleshow/67843595.cms">Morgan Stanley</a>, which said an exit by Walmart is not out of the question with the Indian e-commerce market becoming “more complicated.” “Despite the recent changes in regulations, we remain optimistic abo the ecommerce opportunity in India given the size of the market, the low penetration of ecommerce in the retail channel and the pace at which it is growing. As Walmart scales in India, the company will continue to partner to create sustained economic growth across agriculture, food and retail. Future investments will support national initiatives and will bring sustainable benefits to the country,” a Walmart spokesperson told <a href="https://economictimes.indiatimes.com/industry/services/retail/morgan-stanley-warns-walmart-may-exit-flipkart-post-new-fdi-rules/articleshow/67843595.cms">ET.</a> India’s new e-commerce rules have introduced tighter guidelines that govern Indian e-commerce companies. With the new rules, global players like Amazon or the Walmart-Flipkart entity, are barred from selling products from vendors they have own a stake in. According to the Morgan Stanley report, Flipkart will have to do away with 25% of its products on the platform. The new rules have mounted tremendous pressure on both Amazon and Flipkart, which together command over <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/amazon-india-reportedly-closing-in-on-flipkart/articleshow/63407725.cms">60%</a> of the market share in Indian e-commerce. According to a report in <a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/amazon-flipkart-sales-fall-a-third-as-fdi-norms-kick-in/articleshow/67826139.cms">ET</a>, Amazon and Flipkart saw a third of their sales volume disappear in just three days, after the new rules came in. Last week, Amazon <a href="https://www.businessinsider.in/amazon-india-finds-way-around-new-e-commerce-rules-for-cloudtail-and-appario/articleshow/67831376.cms">reportedly</a> already began removing several items from its website sold via its vendor Cloudtail including products under the brand name “Amazon Basics”. Walmart which has <a href="http://fortune.com/2018/02/20/walmart-ecommerce-3/">failed</a> to make an impact on e-retail globally, had placed its bets on Flipkart to start off its digital wing. Flipkart being one of the biggest e-commerce platforms of India, put Walmart in direct competition with Amazon. However, with the change in scenario it is possible that Walmart might not want to incur a <a href="https://www.bloombergquint.com/technology/walmart-expects-flipkart-to-suffer-rs-5300-crore-loss-this-year#gs.JsJmhTUD">loss</a> in India. See Also: <a href="https://www.businessinsider.in/amazon-india-finds-way-around-new-e-commerce-rules-for-cloudtail-and-appario/articleshow/67831376.cms">Amazon may have found a way around India’s new e-commerce rules</a> <a href="https://www.businessinsider.in/amazon-and-walmart-which-owns-flipkart-stocks-on-sale-as-indias-new-e-commerce-policy-kicks-in/articleshow/67807890.cms">The sale on Amazon and Walmart stocks in US may worsen as new India's e-commerce rules kick in</a> <a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms">Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart</a>

Walmart could exit from Flipkart because of India’s new FDI rules: Report

Is <keyword id="2364818" type="UNKNOWN" weightage="100" keywordseo="E-commerce-3-0">e-commerce 3.0</keyword> only about business tweaks? Almost all experts will tell you that the new format of <keyword id="35621" type="UNKNOWN" weightage="100" keywordseo="e-commerce">e-commerce</keyword> is on its way, but nobody is quite sure what it is like. Some pinpoint it as online shopping, largely influenced by social media parameters, while others are betting big on the mobile impact. No doubt these are crucial indicators, but they only provide you a partial glimpse into the business-to-consumer (B2C) part of it. However, we need to take a more incisive look at the fast-evolving strategic context of e-commerce, which is throwing up some surprising trends that may affect the industry in the long run. Let us take a look at the recent happenings in the Indian e-commerce space to identify the most prominent trends and what they signify. 
	 
	 
	 
	1. Calibrated aggression for survival: That’s exactly what the much-anticipated cash-and-stock deal between <keyword id="6354742" type="COMPANY" weightage="100" keywordseo="Flipkart">Flipkart</keyword> and <keyword id="319719" type="COMPANY" weightage="100" keywordseo="Myntra">Myntra</keyword> has taught us. Competition has been ironed out by strategic <keyword id="42411" type="UNKNOWN" weightage="100" keywordseo="Merger">merger</keyword> in order to survive against global giants like <keyword id="18635" type="CITY" weightage="100" keywordseo="Amazon">Amazon</keyword>. Flipkart is not new to the game but co-founders Sachin and <keyword id="6364080" type="PERSON" weightage="100" keywordseo="Binny-Bansal">Binny Bansal</keyword> have not gone the LetsBuy way this time, for pretty predictable reasons (for your recap, Letsbuy.com was the electronics e-tailer that was acquired by Flipkart in February 2012 and shut down in May that year). 
	 Before the acquisition, the Myntra brand was way ahead of Flipkart as the <keyword id="2364834" type="UNKNOWN" weightage="100" keywordseo="Biggest-India-fashion-e-tailer">biggest India fashion e-tailer</keyword>. While Flipkart required size to survive against the likes of Amazon, the bigger margins enjoyed by fashion e-tailing was an added icing to the cake (after all, fashion is expected to be the largest category in e-commerce over the next five years). So this time around, it was a calibrated aggression on Flipkart’s part and the merger, along with the much-talked-about <keyword id="2364826" type="UNKNOWN" weightage="100" keywordseo="Management-autonomy">management autonomy</keyword> enjoyed by <keyword id="705865" type="PERSON" weightage="100" keywordseo="Mukesh-Bansal">Mukesh Bansal</keyword>’s Myntra, will continue to work for two specific reasons. 
	 One is local competition, not only from <keyword id="6388367" type="COMPANY" weightage="100" keywordseo="Jabong">Jabong</keyword>, which is promoted by Berlin-based <keyword id="1965711" type="COMPANY" weightage="80" keywordseo="Rocket-Internet-GmbH">Rocket Internet GmbH</keyword> (a venture arm of the deep-pocketed Samwer brothers), but also from <keyword id="541988" type="COMPANY" weightage="100" keywordseo="SnapDeal">Snapdeal</keyword>.com, quite a veteran in the marketplace model. It is too early to assume that Jabong has missed the bus in stamping its dominance in the <keyword id="902070" type="UNKNOWN" weightage="100" keywordseo="e-com">e-com</keyword> space and the same applies to Snapdeal, which has recently raised $100 million and could be opting for an IPO in the next 18-24 months. Moreover, if India eases its <keyword id="44528" type="ORGANIZATION" weightage="100" keywordseo="FDI">FDI</keyword> policy further and allows <keyword id="2364830" type="UNKNOWN" weightage="100" keywordseo="Foreign-e-commerce-companies">foreign e-commerce companies</keyword> to sell their products directly to Indian consumers (as of now, only marketplaces are allowed to do this), <keyword id="2364831" type="UNKNOWN" weightage="100" keywordseo="Home-grown-e-commerce-firms">home-grown e-commerce firms</keyword> will require maximum <keyword id="573045" type="UNKNOWN" weightage="100" keywordseo="Customer-loyalty">customer loyalty</keyword> to stay in business and the likes of Myntra will play a key role in ensuring enhanced <keyword id="485911" type="PERSON" weightage="100" keywordseo="brand-loyalty">brand loyalty</keyword>.
<div style="page-break-after: always;">
	&#xa0;</div>

	The way ahead: Similar mergers may happen soon and we may see some monopolistic polarisation in the e-commerce space. If branding and management autonomy can be retained in the same way it had been done in the <keyword id="2196490" type="UNKNOWN" weightage="100" keywordseo="Flipkart-Myntra-deal">Flipkart-Myntra deal</keyword>, a Snapdeal-Jabong deal may very well be a possibility. On the other hand, Amazon may come up with a similar offer for Snapdeal (we don’t rule out <keyword id="161767" type="COMPANY" weightage="100" keywordseo="eBay-India">eBay India</keyword> either) and once again, we may witness the emergence of an e-commerce mega power in India. Also, in most of these deals, unequals could be gunning for merger-of-equals status, thus complicating the merger and acquisition operations. Ultimately, the <keyword id="2364839" type="UNKNOWN" weightage="100" keywordseo="Entry-barrier">entry barrier</keyword> will be too high for small or niche e-commerce sites and staying profitable will become a tough proposition. 
	 
	 
	 
	2. SME focus for marketplace growth: A couple of days ago, Flipkart announced tie-ups with two SME (small and medium enterprise) promotion bodies and signed MoUs with the Federation of Indian Micro and <keyword id="6375845" type="UNKNOWN" weightage="100" keywordseo="Small-and-medium-enterprises">Small and Medium Enterprises</keyword> (<keyword id="174192" type="ORGANIZATION" weightage="100" keywordseo="FISME">FISME</keyword>) and the National Centre for Design and Product Development (<keyword id="2348217" type="UNKNOWN" weightage="100" keywordseo="NCDPD">NCDPD</keyword>). With this move, the Bangalore firm expects to create a powerful affiliation with 50,000 SMEs and artisans by helping them with data analytics, marketing and customer acquisition. The company is also holding talks with several <keyword id="533862" type="UNKNOWN" weightage="100" keywordseo="Manufacturing-clusters">manufacturing clusters</keyword> in Punjab, Uttar Pradesh and Gujarat in a bid to attract more sellers on board and thus ensure strong growth for its marketplace model. 
	 
	As of now, Flipkart has about 3,000 sellers on board, mostly SMEs, and offers 15 million products across 70-plus categories. The company aims to grow the seller base to 12,000 by the end of the current fiscal, according to Economic Times. Myntra, too, has about 100 sellers on board and plans to increase this number to 1,000 by fiscal-end. However, this is too paltry a number, compared to the largest Chinese <keyword id="2049184" type="UNKNOWN" weightage="100" keywordseo="E-commerce-marketplace">e-commerce marketplace</keyword> <keyword id="302749" type="COMPANY" weightage="100" keywordseo="Alibaba">Alibaba</keyword>.com that has about 20 lakh SMEs on board, but has less than 20,000 in India. 
	 As for other key players in India, here are some mindboggling numbers according to media reports. Snapdeal currently features about 500 categories, 100,000 sellers and more than 5 million products (excluding books and movies); eBay has 1.1 million product listings at any given point <keyword id="54921" type="ENTERTAINMENT" weightage="60" keywordseo="spread">spread</keyword> across 2,000 categories and 45,000 sellers on board while Amazon has 15 million products from 5,000 sellers across 24 categories. Amazon has already opened two Fufillment Centers in India, enabling home-grown SMEs to get a scalable and robust national platform. Sellers opting for FBA (<keyword id="2023087" type="UNKNOWN" weightage="100" keywordseo="Fulfillment-by-Amazon">Fulfillment By Amazon</keyword>) send their products to these ‘fulfillment centers’ and once an order is placed, Amazon packs and ships the order.
<div style="page-break-after: always;">
	&#xa0;</div>

	The way ahead: Right now, no one can possibly predict whether the death of the inventory-led e-commerce model is imminent. But one thing is pretty certain – e-commerce businesses need as many products and categories as possible to enhance customer engagement. However, that won’t be possible without growing their marketplaces and bringing on board a huge number of sellers. Hence, the <keyword id="2364811" type="UNKNOWN" weightage="100" keywordseo="SME-focus">SME focus</keyword> and <keyword id="6630005" type="UNKNOWN" weightage="100" keywordseo="private-labels">private labels</keyword> are going to dominate e-commerce 3.0. 
	 
	 
	 
	3. VAS for better customer loyalty: In spite of a Mumbai firm delivering pizza on an experimental basis, civil/commercial drones à la <keyword id="2364850" type="UNKNOWN" weightage="100" keywordseo="Amazon-Prime-Air-drones">Amazon Prime Air drones</keyword> are still not a reality in India (neither they are commercially ready in the US). However, Amazon, eBay, Flipkart and Snapdeal are trying their best to ensure ‘fastest possible’ delivery in the country. While <keyword id="6354743" type="COMPANY" weightage="100" keywordseo="Amazon-India">Amazon India</keyword> offers same-day and guaranteed one-day delivery, eBay is testing a 9-hour delivery model in Mumbai. 
	 Only recently, Flipkart has launched its annual subscription service called <keyword id="2230132" type="UNKNOWN" weightage="100" keywordseo="Flipkart-First">Flipkart First</keyword>, offering a number of benefits including <keyword id="1591575" type="UNKNOWN" weightage="100" keywordseo="free-shipping">free shipping</keyword> for any purchase, free in-a-day guaranteed delivery, <keyword id="2364858" type="UNKNOWN" weightage="100" keywordseo="Discounted-same-day-delivery">discounted same-day delivery</keyword>, 24×7 <keyword id="2364859" type="UNKNOWN" weightage="100" keywordseo="Priority-customer-service">priority customer service</keyword> and more. This is similar to the lucrative logistics part of Amazon’s Prime subscription (currently not available in India), but Amazon offers a bigger service bouquet for its Prime subscribers, including access to songs, movies, TV shows and books. Flipkart, or any other Indian e-tailer for that matter, is yet to launch such extensive customer engagement programme, but the bait has been thrown by Flipkart and to some extent, by Snapdeal, which also offers free same-day delivery in certain regions and hopes to expand this service next year. 
	 
	The way ahead: Some experts feel that e-com businesses will soon curtail services like <keyword id="1972252" type="UNKNOWN" weightage="100" keywordseo="Express-delivery">express delivery</keyword> and free shipping in order to generate more cash. High transportation costs and other logistics issues have been cited as the main culprits. But keeping in mind that <keyword id="758541" type="ORGANIZATION" weightage="100" keywordseo="Amazon-Prime">Amazon Prime</keyword> works more as a <keyword id="1426078" type="UNKNOWN" weightage="100" keywordseo="loyalty-programme">loyalty programme</keyword> and less as a revenue-churner, fixing fickle customer loyalty may lie in developing these services. Now that Flipkart is going to market <keyword id="2364868" type="UNKNOWN" weightage="100" keywordseo="Affordable-tablets">affordable tablets</keyword> under its <keyword id="2338688" type="UNKNOWN" weightage="100" keywordseo="DigiFlip">DigiFlip</keyword> label, the Indian e-commerce giant can very well experiment with some Prime-like services and craft user experience based on ‘All things Flipkart’ just as Amazon does with its affordable <keyword id="785825" type="UNKNOWN" weightage="100" keywordseo="Kindle-Fire">Kindle Fire</keyword>. If that happens and other companies follow suit, e-commerce 3.0 in India will evolve into an inclusive and exciting user experience. For now, let us wait and watch. 
	 
	Images: Thinkstock/Getty Images

Life After
Flipkart-Myntra Deal: Will These 3 Trends Rule E-commerce In India?

<ul><li>A draft policy for India’s burgeoning <keyword id="35621" type="PERSON" weightage="20" keywordseo="e-commerce">e-commerce</keyword> sector is expected to be finalised by the end of the year. </li><li>A key proposal calls for opening up e-commerce firms to 49% foreign ownership, only if they source domestically-produced goods. </li><li>Since 2016, the government has allowed 100% foreign ownership in firms that employ the marketplace model, like <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>. </li></ul> A draft policy for India’s burgeoning e-commerce sector has been in the works for a while. While a government committee, comprising nine sub-groups and led by Suresh Prabhu, the Minister of Commerce and Industry, is putting the finishing touches to the policy, a number of key proposals of have been revealed. And one, in particular, concerns the government’s “Make in India” scheme. An FDI-focused taskforce led by Rita Teaotia, the secretary of the Commerce Ministry, has suggested allowing e-commerce platforms that utilise an “inventory model” to be as much as 49% foreign-owned. Currently, only food retailers are afforded this ownership allowance. E-commerce firms that use the inventory model manage their own inventory and actually own the products that are put up for sale, selling them to consumers directly. However, foreign entities need to source these products domestically and the founder of the business needs to be an Indian resident. The move will likely give small-and-medium enterprises a boost and attract even greater investment to India’s e-commerce sector. The proposal will require the creation of an agency tasked with accrediting “made in India” products. Currently, e-commerce platforms that have even a minimal foreign ownership aren’t allowed to deploy the business-to-consumer model. Since 2016, the government has allowed 100% foreign ownership in firms that employ marketplace models, like Flipkart, which was recently purchased by Walmart. Companies employing the marketplace model act as facilitators between buyers and sellers. So, Flipkart doesn’t directly sell the product but gives registered companies a chance to sell their products. A national regulator The government committee has submitted a number of other proposals. These include a recommendation that calls for the data of Indian consumers be stored “exclusively” in India within two years. This precludes data not collected in India and the recommendation is line with the draft data protection bill released by the by the Srikrishna panel earlier. Additionally, the draft policy also calls for the establishment of a national regulator for the e-commerce industry. This will be vital to ensuring that the interests of consumers and small businesses are safeguarded, especially amid fears that India’s e-commerce sector would be flooded with foreign-made products. The regulator will also ensure that all foreign investment caps are complied with. The e-commerce policy is currently being fine-tuned, before being opened up to stakeholder consultations. It is expected to be finalised by the end of the year.

India may loosen FDI rules in the e-commerce sector to give “Make in India” a boost

New Delhi, The <keyword id="76562" type="COMPANY" weightage="20" keywordseo="Confederation-of-All-India-Traders">Confederation of All India Traders</keyword> (CAIT) in a communication sent to Union Commerce Minister <keyword id="6355222" type="PERSON" weightage="20" keywordseo="piyush-goyal">Piyush Goyal</keyword> demanded <keyword id="2465241" type="PERSON" weightage="20" keywordseo="immediate-action">immediate action</keyword> against e-commerce entities including <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword>, <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword>, <keyword id="830092" type="COMPANY" weightage="20" keywordseo="Zomato">Zomato</keyword>, <keyword id="6358977" type="UNKNOWN" weightage="20" keywordseo="swiggy">Swiggy</keyword> and others. "It is a case of daylight robbery of e-commerce entities in India and therefore demand immediate action against the erring e-commerce portals and online mechanism providers," CAIT said. CAIT has accused Amazon, Flipkart, Zomato, Swiggy and various other e-commerce entities for violation of mandatory display of Country of Origin and Manufacturer, seller Details on products sold through their respective E-Commerce Portals as required under the Consumers Protection (E Commerce) Rules,2020, Legal Metrology (Packaged Commodities) Act, 2011 and guidelines of Food Safety &amp; Standards Authority of India. CAIT has asked Goyal to take action against E-commerce entities including Amazon, Flipkart, Zomato, Swiggy and others. "It is a case of daylight robbery of e-commerce entities in India and, therefore demands immediate action against the erring e-commerce portals and online mechanism providers," CAIT said. CAIT National President B.C. Bhartia and Secretary General Praveen Khandelwal in a communication to Goyal said that e-commerce entities conducting business in India including Amazon, Flipkart and others are highly violating the mandatory conditions spelled out in above Acts. "It is a pity that particularly in e-commerce every guidelines, Rules &amp; Regulations, Laws and policies are being flouted openly and no department has so far taken any cognizance of compliance issues resulting in a highly vitiated and mess like e-commerce trade of India," CAIT said. Bhartia and Khandelwal said that Rule 10 of Legal Metrology (Packaged Commodities) Rules, 2011 provide that e-commerce entities should have to display name and address of the manufacturer, name of the country of origin, common/generic name of the product, net quantity, best before/use by date (if applicable), maximum retail price, dimensions of the commodity, etc. This rule was introduced in June 2017 and provided a transition period of six months thereby its implementation from January 1,2018 but even after a lapse of three years, the above rules are not being complied by e-commerce companies prominently by Amazon, Flipkart, etc. Failure to make declarations as above will amount to selling non-standard packages and will invite penalty under the above said Act, including fine or imprisonment or both, CAIT said. Both trade leaders further said that similar obligations were imposed on e-commerce food business operators vide guidelines issued by the Food Safety &amp; Standards Authority (FSSAI) on February 2,2017. "But such FBOs like Zomato, Swiggy, etc. are not complying with the above rules," CAIT said. Bhartia and Khandelwal said that under Rule 4(2) of the Consumer Protection (E Commerce) Rules, 2020, it is provided that every e-commerce entity shall provide the following information in a clear and accessible manner on its platform, displayed prominently to its users, namely, legal name of the e-commerce entity, principal geographic address of its headquarters and all branches, name and details of its website, and contact details like email address, fax, landline and mobile numbers of customer care as well as of grievance office. Similar provisions are also spelled out in Press Note 2 of the FDI Policy, 2016. CAIT said no e-commerce entity has appointed a Nodal Officer as also complying with above provisions. Important rights of the consumers are being violated as they are not aware of the seller or description of the product at the time of purchase of products from e-commerce portals. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/mrs-bectors-shares-are-down-32-from-the-peak-post-listing-analysts-say-it-is-still-overpriced/articleshow/80430865.cms">Mrs Bectors shares are down 32% from the peak post listing — analysts say it is still 'overpriced'</a> <a href="https://www.businessinsider.in/budget/news/indias-co-working-sector-wants-recognition-under-real-estate-tax-benefits-as-flexible-workspaces-aim-for-a-significant-revival-in-the-post-covid-era/articleshow/80431768.cms">India’s co-working sector wants recognition under real estate, tax benefits as flexible workspaces aim for a significant revival in the post-COVID era</a> <a href="https://www.businessinsider.in/stock-market/news/how-to-check-allotment-status-of-indian-railway-finance-corporation-irfc-ipo/articleshow/80406208.cms">Indian Railway Finance Corporation IPO allotment: Here’s how to check share allotment status</a>

CAIT seeks action against Amazon, Zomato, Flipkart and Swiggy for 'daylight robbery'

<ul><li>Amazon and Walmart lost over $50 billion in market value on Friday</li><li>The new rules in India may hurt Amazon and Walmart's international revenue even more</li><li>Amazon's international sales growth halved in the quarter-ended December</li></ul> India's new rules for online retail kicked in on Friday and that led to a massive <a href="https://economictimes.indiatimes.com/industry/services/retail/amazon-walmart-lose-over-50-billion-in-market-value-after-e-tail-policy-change/articleshow/67805566.cms" data-type="tilCustomLink" target="_blank">sell-off</a> in two blue-chip stocks halfway around the world, in US. Nasdaq-listed Amazon’s shares fell by 5.38% and Walmart’s stock lost 2.06% on the New York Stock Exchange (NYSE). Together, the damage was worth over $50 billion in the market value two stocks. The fact that Amazon's growth is broadly slowing - though still growing - speaks to how incremental e-commerce growth is becoming "somewhat more difficult and expensive," Morgan Stanley analysts <a href="https://www.businessinsider.in/Amazon-is-about-to-look-cheap-Analysts-are-doubling-down-on-their-bullish-calls-even-as-the-companys-growth-slows/articleshow/67798248.cms" data-type="tilCustomLink" target="_blank">said</a>. In other words, the margin of profit on every penny of additional revenue may be smaller than it is now. One of the fears on Wall Street is that both companies Amazon and Walmart, which bought the Indian e-tail major Flipkart in 2018, will lose business in one of the world's largest consumer markets, India. The Narendra Modi government changed the rules in <a href="https://in.reuters.com/article/india-ecommerce/india-tightens-e-commerce-rules-likely-to-hit-amazon-flipkart-idINKCN1OQ09D" data-type="tilCustomLink" target="_blank">December 2018 </a>for foreign players in India's online marketplace, curbing them from offering consumers ‘deep discounts’ or sell their own brands through their respective platforms. The fall in Amazon's share price was worse than that of Walmart because the latest earnings report showed that world's largest e-tailer is <a href="https://economictimes.indiatimes.com/industry/services/retail/amazon-walmart-lose-over-50-billion-in-market-value-after-e-tail-policy-change/articleshow/67805566.cms" data-type="tilCustomLink" target="_blank">already</a> witnessing a sharp slowdown in its international sales. In the three months ending December 2018, the growth in Amazon's revenue from markets outside the US nearly halved to 15% compared to the same time last year. The new rules in India could further eat into Amazon's profit. India changed its policy after complaints from India's small traders who fear that the American giants could squeeze out the small corner shops and dominate Indian retail. India's home-grown retailers accused Amazon and Walmart of unfair bias towards affiliate vendors and predatory pricing. However, as Business Insider <a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms" data-type="tilCustomLink" target="_blank">explained</a> recently, the biggest beneficiary of the new policy may not be a broke Snapdeal or the now-jaded Shopclues. It is likely to be India’s <a href="https://www.businessinsider.in/e-commerce-wars-amazons-jeff-bezos-vs-mukesh-ambani-in-india/articleshow/67620116.cms">largest retail chain operator</a> Reliance Retail, owned by Mukesh Ambani — the richest man, not only in India, but in Asia. It is to be seen how Donald Tump's White House reacts to the change in policy in India that hurts two America's marquee companies. In a world where are shopping less almost everyday, a market like India with a population of over a billion is an attractive spot. The India Brand Equity Foundation (IB estimates that online retail alone will be a $73 billion market in less than three years, more than double the estimated size in 2018. 
 
 
 
 
 <div type="image" title="Column chart." msid="67808780" hostid="261"></div>









 However, allowing foreign retailers an unchecked ride has been a political hot potato in India because still 90% of India's retail market is small, unorganised traders. Still, online retail has grown into a massive opportunity with improving internet access in the world's fastest growing economy, India. As of now, only 3% of the county's retail market is online. 
 
 
 
 
 <div type="image" title="Donut chart." msid="67808798" hostid="261"></div>









 Amazon has <a href="https://www.businessinsider.in/amazon-takes-the-fight-to-walmart-by-investing-another-27-billion-in-india/articleshow/65404423.cms">invested over $4.7 billion</a> in India over the last six years, primarily because it identified the potential of the Indian market. For the same reason, <a href="https://www.businessinsider.in/indian-unicorn-flipkarts-board-approves-15-billion-deal-with-walmart/articleshow/64027810.cms">Walmart bought Flipkart</a> in 2018 for a whopping sum of $15 billion, paying a heavy premium for joining the game late. Now, Asia's richest man Mukesh Ambani is also joining the race and he has a level playing field, thanks to the new government rules, to compete with the two American behemoths with equally deep pocket, if not more. Will this lead to a diplomatic standoff between the Indian and the American government? Tussle over trade barriers are anyway the flavour of the season. SEE ALSO: <h1 style="margin-top: 0px; margin-bottom: 10px; padding-bottom: 20px; border-bottom: 1px solid rgb(238, 238, 238); font-variant-numeric: normal; font-variant-east-asian: normal; font-stretch: normal; font-size: 28px; line-height: 1.2em; font-family: LabGrotesque-Black, Helvetica, Arial, sans-serif; vertical-align: baseline; color: rgb(17, 21, 22); background-color: rgb(255, 255, 255);"><a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms" data-type="tilCustomLink" target="_blank">Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart</a> </h1>

The sale on Amazon and Walmart stocks in US may worsen as new India's e-commerce rules kick in

E-commerce is growing by <a href="https://www.bigcommerce.com/blog/ecommerce-trends/">30% every year</a>, most notably in one of the world’s largest emerging markets—India. The cities of <a href="https://newsroom.shadowfax.in/exactly-how-broken-is-indias-last-mile-logistics-cbc34af75f7c">Bengaluru, Mumbai, and Delhi</a> are responsible for 40% of all E-commerce orders. Still, E-commerce offers many challenges, and it’s extremely difficult to find creative solutions to the traditional challenges facing E-commerce companies. In the context of Indian businesses finding practical and creative solutions to those challenges, it becomes even harder, but some companies are surging ahead of the competition in a race that could be worth hundreds of billions of dollars in the near future. We asked <keyword id="6515681" type="PERSON" weightage="100" keywordseo="ryan-andreas">Ryan Andreas</keyword>, co-founder of <a href="http://quantifiedcommerce.com/">Quantified Commerce</a> about the biggest challenges for e-commerce in India, “e-commerce is facing a crucial moment as companies expand globally…” said <keyword id="10989" type="PERSON" weightage="20" keywordseo="Andreas">Andreas</keyword>, “not only are we going to have to overcome traditional problems like consumer loyalty and brand identification, but as we move into other parts of the globe there are issues that are relevant to the specific countries we’re expanding into.” One of the issues unique facing E-commerce companies in India is infrastructure. India has the <a href="http://web.worldbank.org/archive/website01291/WEB/0__CO-21.HTM">largest network of roads</a> in the world, but only 2% of them are national highways. Combine this with lax government regulations <a href="https://qz.com/1086057/1-5-million-dead-in-a-decade-just-what-is-wrong-with-indias-roads-and-vehicles/">regarding licensing</a> drivers and any E-commerce company that attempts deliveries in India will face problems with traditional forms of delivery. This difficulty in delivery leads to fewer deliveries made on time, or at all, which leads to <a href="https://econsultancy.com/blog/10052-free-shipping-and-delivery-timing-are-key-for-customer-satisfaction">less satisfied customers</a>, which leads to less customer loyalty, which is the death spiral for any E-commerce company. In order to get around these problems,<a href="https://www.linkedin.com/company/quantifiedcommerce/"> Quantified Commerce</a> is making inroads in India’s last mile and logistics infrastructure, and researching drone delivery, which was <a href="https://qz.com/1118172/dgca-indias-aviation-regulator-has-finally-put-out-draft-regulations-for-flying-drones/">recently recognized by the Indian government</a> as a serious alternative to traditional means of delivery. The infrastructure of the country you’re delivering in isn’t the only infrastructure E-commerce companies need to be concerned about. The infrastructure of a company is just as important. Vertically-integrated brands, such as the ones built by <a href="https://twitter.com/QuantifiedC">Quantified Commerce</a>, are becoming more and more mainstream. <a href="http://www.quickmba.com/strategy/vertical-integration/">The benefits of vertical integration</a> allow companies to cut down on costs, improve supply chain coordination, and increase the entry barriers of potential competitors. Because <a href="http://quantifiedcommerce.com">Quantified Commerce</a> is a vertically-integrated company, it owns all of the manufacturing and warehouses. Because it sells directly to its consumers, it has been able to cut down on costs in a big way, while simultaneously building a dominant presence in one of the world’s biggest emerging markets. However, having the infrastructure in place to deliver products to your customers means nothing if you don’t have customers in the first place. A challenge that E-commerce companies face is finding and targeting not just customers, but the right customers and E-commerce companies in India are no different. As India’s <a href="https://www.forbes.com/sites/edfuller/2015/09/10/india-asias-next-economic-dynamo/#6c8d6b89221f">middle class</a> grows they want to spend money, but they need to know where and what they can spend it on. By taking advantage of new advertising mediums like <keyword id="6354576" type="ORGANIZATION" weightage="20" keywordseo="facebook">Facebook</keyword> and Youtube, <a href="https://www.instagram.com/quantifiedcommerce">Quantified Commerce</a> is able to target and advertise directly to consumers. This type of targeted advertising is recognized as <a href="https://www.forbes.com/2010/03/24/behavioral-targeted-ads-advertising-ftc-privacy-cmo-network-ads.html#16ee69df6042">an extremely effective way of generating clicks</a> and converting customers. Not only is <a href="http://quantifiedcommerce.com">Quantified Commerce</a> leveraging new, effective advertising mediums like Facebook and Youtube, it’s also taking advantage of new, exciting, methods of advertising. By partnering with social media influencers <a href="https://twitter.com/QuantifiedC">Quantified Commerce</a> is able to build and earn trust with potential customers, and take advantage of the concept of social-proofing in order to attract, and ultimately convert customers. This a method of earned advertising, which <a href="http://www.nielsen.com/us/en/press-room/2012/nielsen-global-consumers-trust-in-earned-advertising-grows.html">Nielsen reported 92%</a> of users trust more than traditional forms of advertising. With offices located in Times Square, New York, <a href="https://www.instagram.com/quantifiedcommerce">Quantified Commerce</a> has access to the best talent in the world. While bringing new talent on board, <a href="http://quantifiedcommerce.com">Quantified Commerce</a> also grows talent within. They have an emphasis on leadership and education in order to eliminate <a href="https://wiredandnetworked.com/2015/01/23/doing-business-in-india-learn-the-culture-code/">power distance</a>. By focusing on education and leadership initiatives <a href="https://www.linkedin.com/company/quantifiedcommerce/">Quantified Commerce</a> is allowing the smartest and most forward-thinking members of Indian society to have a fair say in business practices. I don’t have to hyperlink anything here to tell you that better ideas mean better business. As India develops both economically and socially it is important to be on the lookout for companies that understand both the social and economic infrastructure of the country. Companies like <a href="https://twitter.com/QuantifiedC">Quantified Commerce</a> not only have an understanding of India but a mastery of digital advertising, which in the wild west that is the Indian E-commerce market, is a winning combination. We will be tracking their progress over the coming years along with the rest of the e-commerce space.

Quantified Commerce’s Ryan Andreas on e-commerce in India

<ul><li>E-commerce players in India including <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword> and Amazon reportedly stand to suffer a massive setback in sales if India’s new foreign investment restrictions come into effect on February 1. </li><li>Both Walmart-owned Flipkart and <keyword id="6354743" type="COMPANY" weightage="20" keywordseo="Amazon-India">Amazon India</keyword> are among companies whose sales may be hit by a loss of $46 billion by 2022. </li><li>However, the government change its stance on India’s new <keyword id="3557940" type="PERSON" weightage="20" keywordseo="e-commerce-policy">e-commerce policy</keyword> clarifying that e-commerce companies will still be able to sell their private labels. </li><li>If the change is implemented, it will probably force e-commerce players to rethink their supply chains. </li></ul>E-commerce businesses in India including Amazon India and Walmart-owned Flipkart may witness a decline in online sales to the tune of $46 billion by 2022 once new rules go into effect on February 1, Reuters reported, citing a draft analysis by PwC. The new regulation mandates that foreign e-commerce businesses can no longer sell goods from companies or entities in which they own a stake. But the government’s position is a unclear after they <a href="https://www.businessinsider.in/amazon-and-flipkart-are-off-the-hook-youll-still-be-able-to-buy-the-amazon-echo-and-marq-products-online/articleshow/67379751.cms">‘clarified’</a> that e-commerce companies can still sell products under their own private label. According to the report, the total volume of sales of goods sold online through digital platforms may see a decline by $800 million in the current fiscal year if the policy does come into effect in February. Revenue will continue to sharply drop over the next three years for those companies that will be forced comply with the new rule. Despite this, the sales may grow but won’t be able meet expectations because of the policy change. Both Amazon and Flipkart — who have majority (70%) of revenue share in the online retail industry of India — are <a href="https://qz.com/india/1525199/modis-new-fdi-rules-will-badly-hit-amazon-india-flipkart/">dependent on sales </a>through group companies for half of their sales, reported Quartz. The new e-commerce rules by the Indian government are aimed at safeguarding the interest of local traders. However, the new rules may also <a href="https://www.businessinsider.in/the-indian-government-just-dealt-a-serious-surprise-to-amazon-and-flipkart-heres-what-that-means-for-online-shoppers/articleshow/67272151.cms">impact consumers</a> who are now accustomed to deep-discounts and ‘exclusive’ launches, which may take a hit as a result of changes in their business model. Before the policy was announced on December 26, Morgan Stanley estimates showed that India’s e-commerce market would witness 30% growth year-on-year over the next 10 years reaching a value of $200 billion by 2027. Amazon and Flipkart, along with other stakeholders, are reportedly <a href="https://www.businessinsider.in/indias-new-e-commerce-policy-has-rivals-flipkart-and-amazon-teaming-up-to-counter-the-new-directive-and-the-republic-day-sale-will-probably-be-their-last/articleshow/67366996.cms">teaming up</a> to lobby against the new regulations since it will severely impact their supply chain operations. See also: <a href="https://www.businessinsider.in/the-indian-government-just-dealt-a-serious-surprise-to-amazon-and-flipkart-heres-what-that-means-for-online-shoppers/articleshow/67272151.cms">The Indian government just dealt a serious surprise to Amazon and Flipkart — Here’s what that means for online shoppers</a> <a href="https://www.businessinsider.in/indias-new-e-commerce-policy-has-rivals-flipkart-and-amazon-teaming-up-to-counter-the-new-directive-and-the-republic-day-sale-will-probably-be-their-last/articleshow/67366996.cms">India’s new e-commerce policy has rivals Flipkart and Amazon teaming up to counter the new directive — and the ‘Republic Day’ sale will probably be their last</a> <a href="https://www.businessinsider.in/amazon-and-flipkart-are-off-the-hook-youll-still-be-able-to-buy-the-amazon-echo-and-marq-products-online/articleshow/67379751.cms">Amazon and Flipkart are off the hook — You’ll still be able to buy the Amazon Echo and MarQ products online</a>

India’s curbs on e-commerce businesses could cost them $46 billion by 2022: Report

<ul><li>Amazon India is converting its biggest sellers into wholesale companies in to order to be compliant with India’s new e-commerce rules. </li><li>Cloudtail and Appario — two of Amazon’s largest vendors —- will sell to a battery of third-party ‘preferred’ vendors according to reports. </li><li>Some of the items that are sold by Cloudtail and Appario are currently unavailable on Amazon India as the company changes its affiliates’ business models.</li></ul>Some items might be unavailable on Amazon India right now but that will soon change as Amazon India is reportedly turning two of its largest vendors — Cloudtail and Appario — into wholesale companies. In order to be compliant with India’s new e-commerce rules — that bars e-commerce companies from selling products supplied by affiliate companies on their shopping sites — Amazon is going to start selling via vendors instead of selling directly to customers <a href="https://tech.economictimes.indiatimes.com/news/internet/amazon-plans-wholesale-makeover-to-become-ecommerce-fdi-compliant/67826264">according</a> to a report by ETtech. Retail to wholesale The e-commerce policy only dictates that e-commerce giants like Amazon India can’t sell products to customers if it the vendor supplying the product is a company in which Amazon has stake. While Cloudtail is a 49-51 joint venture between Amazon and Catamaran India, Appario is a 49-51 joint venture between the online e-commerce giant and the Patni Group. If Cloudtail and Appario were to become wholesale vendors instead, then they would only be supplying their products to third-party ‘prefered’ vendors through Amazon Business in India — Amazon’s Indian B2B marketplace. These third-party ‘preferred’ vendors would then sell those products on the Amazon India portal. Every wholesale vendor has the right to pick its preferred retailer for the products they are selling. Sources told ETtech that Amazon hasn’t completely set aside the idea to sell off its stake to order to comply with the new guidelines, but the wholesale route is a faster process, it will comply with the new forms and Amazon still continues to enjoy the value from the both the companies. The good news for consumers is that items supplied by Amazon will still be available on the site. Category managers at Amazon india are currently figuring out which vendors are ‘preferred’ sellers for each of the brand’s categories. The Amazon Echo smart speakers are still on sale, even though Appario is no longer the supplier. Other brands should be live in the marketplace soon once the business model has been realigned. The new guidelines were issues on December 26 after which, both e-commerce giants — Walmart and Amazon — teamed up to seek an extension of the February 1 deadline but with no success. Local e-commerce players are looking forward to the much anticipated relief from competing against deep discounts and traditional retailers are hoping to regain some market share. See also: <a href="https://www.businessinsider.in/the-indian-government-just-dealt-a-serious-surprise-to-amazon-and-flipkart-heres-what-that-means-for-online-shoppers/articleshow/67272151.cms">The Indian government just dealt a serious surprise to Amazon and Flipkart — Here’s what that means for online shoppers</a> <a href="https://www.businessinsider.in/amazon-walmart-owned-flipkart-set-back-by-new-e-commerce-rules-that-help-mukesh-ambanis-reliance-retail/articleshow/67751026.cms">Mukesh Ambani may be the surprise winner from India's new rules hurting Amazon and Walmart</a> <a href="https://www.businessinsider.in/indias-new-e-commerce-policy-has-rivals-flipkart-and-amazon-teaming-up-to-counter-the-new-directive-and-the-republic-day-sale-will-probably-be-their-last/articleshow/67366996.cms">India’s new e-commerce policy has rivals Flipkart and Amazon teaming up to counter the new directive — and the ‘Republic Day’ sale will probably be their last</a>

Amazon may have found a way around India’s new e-commerce rules

New Delhi, Jan 16 () A day after the world's richest person Jeff Bezos announced fresh USD 1 billion investment in India, Union Commerce and Industry Minister Piyush Goyal on Thursday said his firm Amazon was not doing a favour to the country by the investments and questioned how the online retailing major could incur such "big" losses but for its predatory pricing.
 Goyal, who has not yet given Bezos an audience, said e-commerce companies have to follow Indian rules in letter and spirit and not find loopholes to make a back-door entry into multi-brand retail segment.
 India does not allow foreign investment beyond 49 per cent in multi-brand retailing and has not yet approved any application of overseas retailers.
 "They (Amazon) may have put in a billion dollars but if they make a loss of a billion dollars every year, then jolly well will have to finance that billion dollar. So, it is not as if they are doing a favour to India when they invest a billion dollars," he said at the Raisina Dialogue here.
 The USD 1 billion investment by Amazon.com to help bring small and medium businesses online is on the top of USD 5.5 billion funding it had previously announced.
 The minister wondered why an e-commerce market place model, where a firm provides an IT platform for buyers and sellers, incurring huge losses adding that it needs to be looked upon.
 "They are investing money over the last few years also in warehousing and certain other activities, which is welcome and good. But if they are bringing in money largely to finance losses and those losses in an e-commerce market place model," Goyal said.
 He added that in a fair market place model in a turnover of USD 10 billion dollars, if a company is incurring loss of billion dollars, it "certainly raises questions, where the loss came from".
 Goyal said that how can a marketplace make such a big loss unless they are indulging in "predatory pricing or some unfair trade practices".
 "These are real questions which need answers and I am sure the authorities who are looking at it seek those answers and I am sure the e-commerce companies will have their say on that," he said.
 Fair trade regulator CCI (Competition Commission of India) has recently ordered a probe against e-commerce majors Flipkart and Amazon for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms.
 The minister added that India allows foreign investments in e-commerce market place model and in this model buyers and sellers are free to trade, but the market place player cannot own the inventory, or they can not determine prices.
 There are several established market rules for an e-commerce market place business in India and "I think as long as everybody follows these rules, we very much welcome e-commerce into India," he added.
 Further, he said that India has strict rules for FDI in multi-brand retail trading and anybody who tries to use the e-commerce market place model to get into the multi-brand retail space surreptitiously will have to be questioned and investigated.
 "Whether they are doing that or not is a matter of the investigators to decide...whatever (would be their) findings, that should be respected by everybody," Goyal said.
 He reiterated that investors have to follow the laws in letter and spirit and do not try to find loopholes within the defined letter of the law. RR CS ANZ RR MR
MR

Amazon not doing favour by investing USD 1 bn dollar: Goyal

<ul><li>Indian e-commerce leaders recently had a meeting with the Commerce and Industry Minister <keyword id="6355222" type="PERSON" weightage="20" keywordseo="piyush-goyal">Piyush Goyal</keyword>. </li><li>During the meeting, Goyal told the likes of <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword> and Flipkart to comply to rules in India. </li><li>Goyal, who was very well prepared for the meeting, had multiple follow up questions for comments made by e-commerce leaders, according to a source.</li></ul>In a closed door meeting with Indian e-commerce leaders held recently, Commerce and Industry minister Piyush Goyal was at his candid best with representatives from Amazon and Flipkart. Goyal not only took a crack at the American multinationals for whining to their home government, he also warned them in no uncertain terms that regulations will catch up if the companies ever tried to side step, a source privy to the discussion told Business Insider. While companies expressed their concerns regarding the uncertainties in the Indian e-commerce space, participants in the meeting were quite impressed by Goyal’s interest and knowledge of the sector. “The minister was very well briefed and had counter questions on most topics for the e-commerce players present in the room,” said the source. India’s new e-commerce rules had introduced tighter guidelines that barred global players like Amazon and the Walmart-owned Flipkart from selling products from vendor companies where they own a stake. During this meeting, Goyal also told Amazon and Walmart's Flipkart that they must ensure compliance with new foreign investment rules and also steer clear of deep discounts on their platforms, according to a <a href="https://in.reuters.com/article/india-ecommerce/rpt-india-warns-foreign-e-commerce-firms-like-amazon-flipkart-over-discounts-sources-idINL4N23X149">Reuters report</a>. Flipkart had recently run into trouble when Indian startup GoQii had accused the Walmart-owned company for running deep discounts on the latter’s products. The report which quoted three sources present in the meeting also said that the government was committed to protecting small traders in India from “predatory behaviour by foreign-funded companies”. In summary, the Indian government has made its priorities clear to the companies and asked them to fall in line.

India's new industry minister is savvy and wary of Amazon and Walmart-owned Flipkart

Ten years ago, my mother severed her years-long allegiance with her local shopkeepers and started buying products online. It felt like a historical moment. All her friends and their friends gradually followed suit too. The material force driving this transformation in India's consumer landscape - that kicked off with <keyword id="6354742" type="COMPANY" weightage="20" keywordseo="Flipkart">Flipkart</keyword> in 2007 deciding to sell books - was <keyword id="112217" type="PERSON" weightage="20" keywordseo="Discounts">discounts</keyword>. Since then, this trail mix of coupons, deals and sales has generated its own feeding frenzy and has become a crucial component on every online retailer's entry strategy in India. Apart from being the major driver of sales, discounts have made annual bumper selloffs a staple Indian tradition. Flipkart’s Big Billion Days and <keyword id="18635" type="CITY" weightage="20" keywordseo="Amazon">Amazon</keyword>’s Great Indian Festival are important for customers, big businesses and small businesses. Millions of products are sold. After Flipkart’s festive sales last year, the gross merchandise value for the industry reached Rs. 9000 crore - approximately $1.3 billion. While a <a href="https://www.bcg.com/en-in/publications/2017/marketing-sales-globalization-new-indian-changing-consumer.aspx">BCG report released last year</a> proclaimed that the price-conscious Indian consumer now prefers convenience over discounts when buying products online, <keyword id="35621" type="PERSON" weightage="20" keywordseo="e-commerce">e-commerce</keyword> firms are still competing in a proverbial race to the bottom. Everyone wants to offer the lowest prices. And what's more, the government has now legitimised this discounting model. The <keyword id="6354751" type="UNKNOWN" weightage="20" keywordseo="income-tax">Income Tax</keyword> Appellate Tribunal, on April 25th, allowed Flipkart to continue recording discounts on its products as marketing and advertising expenses, thereby allowing the e-commerce firm to claim tax deductions on them. Flipkart was appealing a ruling from the Income Tax Department, which said it owed ₹1.1 billion in unpaid taxes for the year ended March 2016. The move will allow India’s e-commerce firms to a sigh of relief while encouraging their loss-leading impulses. On the other hand, it will also ensure that price-conscious consumers keep getting the benefits of heavy discounts on online shopping. The economics of discounts However, there is more to discount policies than meets the eye. The IT Dept, last year, had sought to make e-commerce firms classify these as a “capital expenditure”, which is taxed over a period of 4 to 10 years, as opposed to “revenue expenditure”, which refers to daily expenses that are deductible in the period they are incurred. When Flipkart offers customers discounts, the company absorbs these costs. Its sellers are usually paid in full or charged lower commissions, even though customers don’t pay full amounts for products. Under the IT Department’s proposed classification, Flipkart would not have been allowed to deduct the full value of these costs from its bottom line, which in turn would have increased its tax liability. The IT Dept’s rationale was that since discounts allowed companies to build their brands and retain customers for the long haul, they should be classified as a capital asset - essentially, an asset that provides returns over an extended period of time. However, brand value is largely an intangible cost and hence, it is a subject of confusion. Why it pays to report a loss Flipkart said that it needed to offer discounts on its products in order to achieve greater sales and increase its market share, making these discounts tax-deductible marketing expenses. Under the Income Tax Act, the government does not have the authority to levy taxes on such expenses, which fall under "revenue expenditure". This is precisely why e-commerce firms like Flipkart and Amazon India are reporting losses in the first place - to avoid taxes. These firms offer discounts to consumers in order achieve high sales, and write off these discounts as marketing expenses - leading to a net loss - so that they aren’t liable to pay tax on them. For the year ended March 2017, Flipkart’s net loss reportedly widened by<a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/flipkart-revenues-rise-29-losses-swell-68-in-fy17/articleshow/62761811.cms"> 68% to ₹87.71 billion</a> while sales rose 29% to nearly ₹200 billion. Despite reporting losses, the sales machine keeps on chugging because these firms draw up on the sizeable investments of backers like Softbank Corp, or in Amazon’s case - cash reserves, in order to finance these discounts. If discounts were to be classified as capital expenditure, e-commerce firms would have no reason to offer them and without the discounts, customer demand would plummet,. Under the scanner E-commerce firms have been under the IT Dept’s scanner for a while for availing tax deductions on discounts while reporting high sales. In order to set a precedent for the rest of the industry, India’s income tax authorities had asked Flipkart and Amazon to reclassify their discounts as capital expenses in August 2017. The following December, the IT Dept ordered Flipkart to pay up ₹1.1 billion. Flipkart<a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/income-tax-panel-refuses-to-stay-rs-110-crore-tax-demand-on-flipkart/articleshow/62876893.cms"> unsuccessfully appealed the decision</a> in February 2018, explaining that it couldn’t pay taxes on “fictional” assets, before lodging a renewed appeal with the Income Tax Appellate Tribunal. Flipkart, Amazon and their competitors in the online retail space aren’t only causing headaches for income tax authorities. Physical retailers like the Future Group, Shoppers Stop and members of the Indian Cellular Association (ICA) are finding it hard to navigate India’s retail industry as more and more consumers scour deals online. Earlier this month, the Retailers Association of India (RAI), an industry body that includes Future Group and Reliance Retail, wrote a letter to the Suresh Prabhu, the Union Minister for Commerce and Industry, alleging that online retailer were violating India’s FDI rules by<a href="https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/retailers-seek-action-against-flipkart-amazon-for-violating-fdi-rules/articleshow/63674973.cms"> by lowering prices of products on their websites and illegally funding “abnormal discounts.</a>” Under India’s foreign investment regulations, retailers can only be foreign-owned if they function as marketplaces to connect vendors and buyers, without actually influencing prices. A similar letter was sent by the ICA explaining that e-commerce firms were driving down prices for mobile handsets with direct and indirect discounts, resulting in the closure of mobile retail outlets. The commerce and industry responded by<a href="https://economictimes.indiatimes.com/industry/services/retail/rbi-ed-need-to-look-into-charges-against-e-tailers/articleshow/63839420.cms"> passing the buck on to</a> the Reserve Bank of India and the Enforcement Directorate. A decision is awaited. How long can the party continue? India’s e-commerce industry is relatively young, and growing fast (it is expected to touch<a href="https://www.ibef.org/industry/ecommerce.aspx"> US$188bn by 2025</a>) as more and more consumers get access to the internet and change their buying habits. As a result, e-commerce firms are not focussing on profitability for now. Their overarching purpose is to increase their market share by driving up sales and the number of active monthly customers. However, as opposed to selling everything for cheap, they’re focusing their discounting approach on popular segments like<a href="http://indianexpress.com/article/business/companies/e-commerce-sales-the-economics-of-discounts-amazon-flipkart-snapdeal-big-indian-sale-4651737/"> electronics and clothing</a>. Much like the telecoms industry, where Jio has sparked a price war wherein everyone is trying to undercut each other to hold onto the market, once a number of competitors are forced to leave after burning too much cash, the victor will be in a position to raise prices for everyone. Snapdeal has already become a casualty of the discount war. Now, with Walmart set to<a href="https://www.livemint.com/Industry/YuoY0Iim6xhlBdE7gdz7yL/FlipkartWalmart-deal-on-track-butAmazon-remains-a-contend.html"> purchase a majority stake in Flipkart</a> to take on Amazon, India’s consumers could benefit from lower prices for at least the medium term. Both these entities have a lot of money to spare and are comfortable playing the long game. However, in the event that the Walmart deal doesn’t go through and Amazon ends up joining forces with Flipkart, then the combined company will have<a href="https://www.bloombergquint.com/business/2018/04/08/flipkart-amazon-combine-may-face-close-scrutiny-for-competition-aspects"> a monopoly</a> over the online retail segment- spelling doom for price-conscious consumers. The Indian government is currently in the process of formulating<a href="https://www.livemint.com/Industry/EuTJ9j7Dn4VT5CyrpaZL2J/Framework-for-national-ecommerce-policy-to-be-finalized-soo.html"> a policy framework for the e-commerce sector</a>. It’s goals, however, are conflicting. On one hand, it will try to level the playing field between e-commerce firms and brick-and-mortar retailers and also increase the tax liabilities for online retailers. On the other, it does not want to disincentivise companies from entering the e-commerce space and reduce the industry’s overall competitiveness. It will be a tricky balancing act.

You Searched For "india e commerce rules" and got 13 results

India decides to opt-out of WTO e-commerce talks over digital tax concerns: Report

Prabhjote Gill

Ambani vs Amazon

Others

Walmart could exit from Flipkart because of India’s new FDI rules: Report

Sanchita Dash

Life After Flipkart-Myntra Deal: Will These 3 Trends Rule E-commerce In India?

Sanghamitra Mandal

India may loosen FDI rules in the e-commerce sector to give “Make in India” a boost

Dilsher Dhillon

CAIT seeks action against Amazon, Zomato, Flipkart and Swiggy for 'daylight robbery'

IANS

The sale on Amazon and Walmart stocks in US may worsen as new India's e-commerce rules kick in

Sriram Iyer

Quantified Commerce’s Ryan Andreas on e-commerce in India

Sponsored Post

India’s curbs on e-commerce businesses could cost them $46 billion by 2022: Report

BI India Bureau

Amazon may have found a way around India’s new e-commerce rules

Prabhjote Gill

Amazon not doing favour by investing USD 1 bn dollar: Goyal

PTI

India's new industry minister is savvy and wary of Amazon and Walmart-owned Flipkart

Sanchita Dash

India, your e-commerce discounts are safe

Dilsher Dhillon

Popular Keywords

Buying Guides