After a judgement by the Delhi High Court banning ecommerce website ShopClues from selling counterfeit products in November, the All India Online Vendors Association (AIOVA) has asked the consumers affairs ministry and the Department of Industrial Policy and Promotion (DIPP) to widen the ruling to all ecommerce retailers operating in the country.
Last month, the Delhi High Court had ruled against ShopClues based on complaints by American electronics brand Skullcandy and french cosmetics maker L’Oreal, of counterfeits being sold on the platform. The high court also directed the company to disclose details of all sellers on its website, obtain a certificate from sellers on genuineness of products, and enter into agreements of authenticity with sellers.
AIOVA represents more than 3,200 sellers who sell on marketplaces such as Flipkart, Amazon, and Snapdeal in India.
In the AIOVA letter seen by Inc42, the industry body also demanded that the Centre set up a regulatory body to monitor the trade practices of ecommerce players and their policies towards vendors.
“Marketplaces evade liabilities by claiming to be intermediaries,” the group said, adding that “While all marketplaces claim to have programmes to remove such products, the programmes of some marketplaces work in a retrospective manner.” This means that the marketplace usually takes action only when a case of counterfeiting comes to light.
While there are laws for ecommerce companies to ensure the removal of fake products, the enforcement of these rules are currently through litigation and judicial process which takes a long time and affects a lot of consumers in the interim, AIOVA argued.
Marketplaces And Sellers: A Troubled Relationship
While ecommerce majors Flipkart and Amazon trade blows over supremacy in India, their policies have created discontent among online sellers who argue that ecommerce companies give preferential treatment to their in-house sellers.
Earlier in December, the online sellers’ association wrote to Prime Minister Narendra Modi, listing their grievances against ecommerce companies and alleging that small players were being exploited by the likes of Amazon and Flipkart.
In the strongly worded letter, AIOVA wrote, “It is clearly evident that the entire ecommerce ecosystem has been damaged in the last four years due to the silence adopted by your office and the control of India’s retail market has been passed on to the hands of two foreign companies.”
AIOVA has also recommended a separate definition for ecommerce of retail goods and highlighted the need for ecommerce to be considered as a separate formal industry.