With the Indian ecommerce industry witnessing global entrants such as Walmart, ecommerce companies such as Snapdeal and ShopClues have welcomed the government’s decision to reinforce the implementation of Press Note 3 for FDI (foreign direct investment), stating that it would facilitate a level-playing field for marketplaces as well as sellers.
These companies believe that the new rules will dissuade “malicious practices” being carried out by certain platforms for some “proxy sellers”.
This comes on the heels of several complaints and protests against ecommerce leaders Flipkart and Amazon for circumventing the norms of Press Note 3, which disallow one seller from selling more than 25% of the total products on the marketplace.
A ShopClues spokesperson said on the development: “The decision of having a regulator to reinforce the Press Note 3 is indeed a welcome move, which has a potential to leave no room for any marketplace to circumvent the intent of the law while possibly adhering to its letter. This will certainly facilitate level-playing field for all level of marketplaces and discourage any malicious practice carried out so far by any of the operators.”
An Inc42 email query sent to Amazon and Flipkart, who control 70% market share in the Indian ecommerce market, didn’t elicit any response till the time of publication.
Earlier, reports had surfaced that the government has decided to create a separate wing comprising officials from the Department of Industrial Policy and Promotion and the Enforcement Directorate to enforce implementation of Press Note 3, which deals with foreign investment in ecommerce.