FDI in E-commerce
Q. Which of the following is/are true regarding new rules of FDI in e-commerce?
1) Due to new rules of FDI in marketplace e-commerce, the customers will get huge online discounts.
2) As per the new rules, the e-commerce players will act as technology providers and not as retailers.- Published on 04 Apr 16a. Only 1
b. Only 2
c. Both 1 and 2
d. Neither 1 nor 2
ANSWER: Only 2
- The government’s foreign direct investment norms for e-commerce marketplaces may prove to be a dampener for consumers due to the clampdown on pricing freedom for marketplace operators and lack of adequate post-sales safeguards.
- Marketplace retailers will not be able to extend lucrative discounts to attract customers. However, it appears that with the consent and association of the owner of the inventory, the e-retailers may yet be able to provide additional promotional discounts. However, discounts will be to a certain point and by sellers only.
- It is being said by some that e-commerce marketplaces should behave like marketplaces and provide technology platforms to sellers by charging a fee rather than getting into an inventory-based model. Fees should be their only income; this can put an end to the predatory pricing and provide level playing field for all.
- Additionally, the customer might be left in the lurch thanks to other conditions in the policy. Marketplaces have been allowed to provide services such as warehousing, logistics support, order fulfillment and payment collection to the seller. However, ‘post sales, delivery of goods to the customer and customer satisfaction will be the responsibility of the seller.’
