Regulation

India Gov’t Tightens The Reins On Amazon, Flipkart Sales

The Indian government has made new rules for websites like Amazon and Flipkart and changed how they’re allowed to sell goods in the country, according to reports.

Under the new rules, which go into effect on Feb. 1, India will not allow eCommerce companies to sell products from businesses that they have an equity interest in.

Also, the companies can’t have exclusive agreements with sellers. For example, Xiaomi can no longer sell Mi phones only on Flipkart, which is a common practice in the country during a new phone launch.

“An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity,” the commerce ministry said.

The regulations are a response to complaints from traders and retailers who say eCommerce companies have an unfair advantage, and are using their inventories to sell products at extremely low prices.

This practice happens because eCommerce companies can make huge purchases in bulk and then sell merchandise through exclusive agreements or arrangements.

In October, the All India Online Vendors Association (AIOVA) filed a petition with an anti-trust organization, the Competition Commission of India, saying that Amazon gives preference to sellers it has ownership in, like Cloudtail or Appario. A petition was also filed against Flipkart.

The new rules say services given to vendors should be done in a fair and non-discriminatory way. The rules are meant to aid and appease India’s small traders and farmers.

In a statement, according to Reuters, the Confederation of All India Traders said that when the law goes into effect the policies of deep discounting and what it called “predatory” pricing won’t happen anymore.

Amazon India said it’s evaluating the new policies.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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