Why restrict e-commerce players when offline retailers follow the same practices
- The government has implemented consumer protection (
E-commerce) Regulation of 2020, two weeks ago. SAIAruna Sharma stressed that e-commerce platforms should not be treated so differently, as retailers also follow similar practices.
- As retailers celebrate the regulation right now, it could hurt them more as e-commerce has liberalized trade.
The government of
The amendment has been welcomed by several traders and associations such as the Confederation of All Traders of India (
In a recent webinar hosted by the public policy think tank “The Dialogue” on the “Draft
Deepak Shetty, director of software solutions company Zed-Axis Technologies, pointed out that India’s micro, small and medium-sized enterprises (MSMEs) are currently expanding into the global market and that this would not have been possible without the platforms of e-commerce. “I [from the perspective of a small seller] would have to spend a lot more money to open offices abroad and go to trade shows, but today I am able to do it cheaply, ”he added.
Meanwhile, Aruna Sharma, an Indian Administrative Service (IAS) officer and former Indian government secretary, noted that consumer behavior is now shifting towards e-commerce portals, just as it has shifted to shopping malls. over ten years ago. Retail and e-commerce platforms will need to coexist as technology takes over.
Meanwhile, Sharma stressed that the e-commerce sector should not be treated so differently from the retail sector. Although e-commerce platforms are prohibited from granting preferential treatment to any seller under foreign direct investment (FDI) rules, retailers are free to do so. She explained that any retailer can position products based on the commission they earn on their sale, but e-commerce companies are not allowed to apply similar tactics to promote products that give them higher commissions.
Likewise, Shetty noted that e-commerce policies are not something dynamic, but are based on the practices followed even by retailers. “If I take e-commerce out of the guidelines and put retail in it, it will still mean the same thing. I cannot hold the platform responsible for a seller, ”he added.
A minimum policy may be the best solution to help sellers
Jehangir Gai, Honorary Co-Secretary of the Consumer Welfare Association stressed that minimal regulation is required in this space to ensure that consumer demands are met. He also pointed out that more regulations lead to more corruption and interference. “The goal is laudable, but the methodology is flawed,” he added.
He also agreed that there were issues within segments, but “let’s not kill the whole industry, in the name of a few black sheep.”
Echoing Gai’s thoughts, Shetty made comparisons between the real world and a classroom. “Let teachers make rules or allow students to come up with their own ideas for solutions. Second part where we cultivate creativity, and it’s the one that works. The restriction will lead to limited business growth, ”he added.
The latest consumer protection (e-commerce) rule amendment of 2020 banned e-commerce companies from making flash sales that offer products at “significantly reduced prices, high discounts, or any other attractive promotion or offer during a predetermined period of time on selective goods and services or otherwise with the intention of attracting a large number of consumers.
The complaints system can be beneficial for customers
It also aims to facilitate the grievance process in electronic marketplaces by requiring each of these platforms to appoint a compliance officer, a resident grievance officer and a nodal contact person in India.
Commenting on the same, Zed-Axis’ Shetty said there certainly should be a grievance officer, but the government should give them “enough teeth to make decisions in favor of the consumer”, otherwise there is. not really the right solution. However, Gai noted that India’s grievance mechanism has failed in other segments and it can happen in this segment as well.
He also mentioned that flash sales help consumers. “Over the years we have had monopoly practices and restrictive business behaviors, I think that comes from traditional systems. I think these flash sales ultimately help consumers, ”he said.
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