The Indian government on Wednesday, issued new guidelines for e-commerce market. The move has disrupted the fast growing e-commerce market as per the industry experts. The new guidelines, which have to be complied from February, can severely impact the business of e-commerce giants like Amazon and Flipkart, as according to new guidelines, these online retailers now can’t enter into any “exclusive deal” pact with the seller as that deal would be declared void ab initio. As per the new guidelines, the online retailers now can’t sell products from a vendor in which it has some stake, also it bars them from making any exclusive deals with the seller.
Flipkart and Amazon have both opposed the new rules vehemently but, have assured compliance. Industry sources say that the new guidelines would adversely affect the online retailers and can lead to dip in foreign investment in the e-commerce market if such polices are continued by the government in future. According to the experts the new guidelines are issued because of the approaching elections. Through this the NDA government wants to appease its core vote base that is trader and offline retailers. As per the government the new rules would give equal and fair opportunity to the offline traders, who were earlier lagging behind from online retailers because of huge discounts and exclusive deals, which has marred the offline retailers heavily in the last few years.
The guideline related to the “exclusive deals” is going to dent a heavy blow to the Amazon and Flipkart as both the e-commerce giants generate huge revenue from the exclusive deals which they make with smartphone companies and other electronics seller.
In October, Amazon sold over 3 million smartphones in just a single day through an “exclusive deal” pact with smartphone company Oppo. Now with the new guidelines in place, the company won’t be able to make such extremely favorable exclusive deals. Thus, the new rules by the government may have appeased to the traders and offline retailer but has surly disappointed the e-commerce biggies.