New Delhi: In a stern warning to errant e-commerce players, Union Commerce and Industries minister Piyush Goyal Tuesday asked them to act only as a service provider, bridging the gap between buyers and sellers and do not engage in trading themselves or push certain products, adding that those who break the law will have to urgently change their business model.
In a virtual interaction with reporters, Goyal said there was no change in the country’s e-commerce policy which was robust and well designed.
The minister, however, admitted that the government has received complaints from consumers and retailers, which are being looked into.
“There are certain complaints from consumers and from small retailers about the certain practices of e-commerce companies, which are under investigation,” Goyal told reporters.
Goyal said the government has sought some information from the e-commerce companies.
“We are also seeking some clarification to ensure that the e-commerce sector works in the true spirit of the law, of the rules that have been laid down for e-commerce,” said the minister.
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Reiterating the policy, Goyal said e-commerce platforms are supposed to provide a neutral platform where buyer and sellers can trade with each other.
India’s e-commerce or online market place is dominated by US giants such as Amazon-owned by Jeff Bezos and Flipkart, which was started by Indian promoters but were acquired by the world’s biggest retailer Walmart in 2018.
Online retail to surpass traditional retail in 5 years
According to industry estimates, India’s e-commerce market size has been estimated at around $30 billion in 2020 but it is expected to surpass the traditional retail by 2025 when it is likely to surpass the business of $100 billion whereas traditional retail will lag behind with an annual business of $80-85 billion.
India’s small retailers led by Confederation of All India Traders (CAIT) have often accused e-commerce players such as Amazon, Flipkart, Snapdeal and several others in engaging unfair trade practices and selling products and services themselves rather than providing a platform to buyers and sellers.
Retailer’s bodies have also accused multinational e-commerce giants of resorting to predatory pricing, offering big discounts by using their deep pockets that often work against the interest of small retailers as they cannot compete with large multinationals in terms of scale of the economy.
“The platform should not become a part of the trading transaction, should neither be funding it, should neither be having algorithms to give preference to one or the other, should neither be promoting their own products,” said the minister.
Goyal said these e-commerce players must provide all data to market participants that is required for making a rational choice.
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“The choice should be a free choice of the consumer,” said the minister.
“We believe the buyers and sellers should be given the opportunity to trade with each other. The platform is only a service provider,” Goyal added.
In a strong warning to some e-commerce players, the minister said the errant players will have to correct their business practices.
“Those who break that law will certainly have to respond to our concerns and correct their business practices at the earliest,” Goyal said.
