Ecommerce companies such as Flipkart, Amazon, Paytm Mall and Snapdeal are reportedly yet to display names, addresses and other contact details of its sellers of the product listed on their platforms. This move was mandated as a part of the new ecommerce guidelines.
The changes in the FDI regulations in ecommerce policy was announced by the central government on December 26, 2018. The new guidelines came into effect from February 1, 2019.
As a part of the new guidelines, the ecommerce marketplaces are to provide contact details of all the sellers offering products in its platform so as to ensure that the consumers can reach out to them in case they have any complaints related to the products.
According to reports, currently, the customers are allowed to lodge their complaints via online help centres of the ecommerce companies rather than taking up the issue directly with the sellers.
In response to an email enquiry, an Amazon spokesperson has said, “We have always been and continue to be in compliance with all local laws”.
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This mandate is especially needed at a time when sale and delivery of fake products via ecommerce platforms is on the rise. In November 2018, a survey by LocalCircles stated that at least one out of five respondents had received fake products from ecommerce players within the last six months.
In order to curb the sale of fake goods, last year, the Drug Controller General of India (DCGI) issued notices to ecommerce giants — Flipkart, Amazon and IndiaMART — warning the companies of penal actions against the sale of “spurious and adulterated” cosmetics.
Amazon was also put under scrutiny last year when Delhi High Court directed Amazon Seller Services to delist some sellers on its platform after Beverly Hills Polo Club accused them of selling fake products through the platform.
In order to keep a check on the companies, the new guidelines were introduced with an aim to promote the domestic players and ensuring a level playing field. Under this, the central government prohibits any ecommerce players to sell products on its platform in which it owns a stake. Further, it also added that no etailers will be allowed to mandate an online seller to sell products exclusively on its platform.
However, as a part of this new ruling, recent reports suggested that both global companies, Amazon and Walmart which have heavily invested in the Indian ecommerce sector has together lost $50 Bn in market capitalisation.
At a time when Amazon had committed to invest about $5 Bn in India, the company’s shares fell by 5.38% to $1,626.23, causing it to lose $45.22 Bn.
In order to comply with the ruling, the company has also to list down all the product listings from its preferred sellers such as Cloudtail and Appario Retail in India.
With the implementation of the new guidelines, the effect of these changes in the sector is yet to be seen as the companies continue to explore ways to comply with the ruling. Recently, Amazon’s CFO Brian Olsavsky had said that the company was uncertain about the impact that these new rules and is currently analysing the situation in order to comply with the rules.
Recent reports also suggested that US-based retail chain Walmart is reportedly looking to exit Flipkart.
[The development was reported by ET]