The scope of India’s new e-commerce rules, as proposed by the Department of Consumer Affairs, goes beyond online retail and spills over into food delivery and even ride-hailing.
India’s new draft e-commerce rules, announced last week, have kicked up a storm.
The changes proposed by the Department of Consumer Affairs are wide-ranging in nature, spilling into multiple aspects and sectors beyond just e-tailers like Flipkart, Amazon India and their flash sales . ET takes a look at some of the other proposals that could impact the growing route of retail. Some of these proposals and its implications are still being debated.
Government’s original proposal indicated a blanket ban on all flash sales but a clarification later said it won’t apply for ‘conventional’ flash sales. These are typically pre-decided sale events for new smartphones with limited stocks at a discount. It is not clear what’s a conventional flash sale.
On display or promotion of advertisement by sellers
E-tailers should not allow ‘misleading’ ads potentially on pricing, quality, guarantee. They shouldn’t advertise sellers offering discounts. This could also impact the growing online advertising business of e-tailers.
On country of origin
E-tailers have to ensure product listings have the details of country of origin (CoO)—an arduous task given Flipkart and Amazon have millions of products listed on their platforms.
What could be really difficult to implement is recommending local alternatives each time a consumer looks at an imported good or sevice. Ranking local alternatives would be difficult to implement too. E-tailers and sellers both are not enthusiastic about maintaining these details.
On cancellation charges and explicit consumer consent
E-tailers typically highlight certain products as non-returnable at pre-purchase stage and generally offer free exchange or refunds to consumers. Explicitly asking consumer consent can only strengthen the online shopping experience for consumers.
No e-commerce entity shall indulge in mis-selling of goods or services
The likes of Flipkart and Amazon India operate the marketplace and they are not directly involved in selling goods. For platforms offering services, like food delivery, travel, they too act as a marketplace.
E-tailers shouldn’t mislead users by manipulating search results
The jury is still out on how these algorithms work on online marketplaces in India and abroad. In India, Flipkart and Amazon India are accused of promoting their brands, sellers by tweaking search results.
Etailers shouldn’t permit usage of their name for brands—if such practices amount to unfair trade practice and impinges on the interests of consumers.
Private brands of Flipkart and Amazon, who have the prefix of the e-commerce brand attached to them will be under scrutiny if it turns out to be anti-consumer interest and anti-competitive.
On sponsored listing of products and services ‘distinctly identified’
This can only bring further transparency for online shoppers so they know more about the purchase they are about to make.
No e-commerce entity, which holds a dominant position in any market, shall be allowed to abuse its position.
This is an area that’s seen parallel action from CCI, which is fighting a case in Karnataka High Court to probe e-tailers and their trade practices following complaints from sellers.
On need of data to agencies within 72 hours
Providing information to agencies within a certain period of time, provided there is adequate reasoning, could be more compliance for e-tailers and sellers than anything else.
No logistics service provider of a marketplace e-commerce entity shall provide differentiated treatment between sellers of the same category.
E-tailers typically want more sellers to ship their goods through the marketplace’s in-house logistics arm so it could be delivered sooner.
On related parties not doing anything with the associated marketplace
This can have a major impact on operations of e-tailers like Amazon India if related parties are not allowed to sell on the marketplace. Amazon owns minority stakes in sellers such as Cloudtail and Appario, which are prominent sellers on the company’s India marketplace. The view among legal experts is still split.
On ‘fall back liability’ with e-tailers and platforms providing service
E-tailers selling goods and services have maintained that the liability should be with sellers selling goods or services while they have their own internal checks.
Source – https://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/new-india-e-commerce-rules-and-their-impact-explained/83916940