E commerce policy will end your discounts, cashback soon?

E commerce policy

E commerce policy has been updated and published by the Ministry of Commerce and Industry through a circular about Foreign Direct Investment (FDI) in e-commerce firms.

It will be in effect from 1st Feb 2019 and applies for all e-commerce firms operates in India.

The new E commerce policy states, online E-commerce firms will not allow operating through inventory based model (IBM).

IBM helps online players to manipulate the prices of items, buffers the products, offers heavy discounts, cashback, which in fact ultimately hamper the brick and mortar stores business (Offline stores).

This article Emailed on, Thursday, December 28, 2018 to our Newsletter subscribers at 7 Am IST.

FDI is not permitted in Inventory based e-commerce business models in India.

Restrictions by new E commerce policy ?

Brands will not be able to sell more than 25% of its total sales through single e-commerce platform. So limited discounts and quantity in 2019?

The Joint Ventures created by Amazon or Walmart (Flipkart’s parent company) with its vendors for the inventory or supply purpose will be restricted to sell the goods on e-commerce platform.

The cash back offers by any e-commerce entity to buyers has to be fair and non-discriminatory. Hence, your heavy discounts will be gone?

Similarly, E-commerce platform cannot confined any seller to sell any items exclusively on respective platform only.

For example One-plus smartphones are exclusively available on Amazon.in only or Xiomi Smartphone flash sale is on Flipkart only.

Helpful for whom?

The new guideline and policy by the government will help to empower (?) the brick and mortar business and MSME.

It also helps to prevent the pricing fluctuations created by e-commerce players through inventory based business models. For instance, to minimize the control of the market.


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