Flipkart’s acquisition by Walmart is still opposed by most critics, calling the government has made a bad financial move by approving it. Several protests and objections are how it went to final approval.
And the recent statement by the government can further pinch the e-commerce players, especially Amazon India and Flipkart.
Indian Government Blows Off with New Rules to Online Marketplaces – Amazon & Flipkart to Hit Badly
Yesterday, as a part of new FDI norms, Commerce Ministry has said “An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity.”
Converting plainly, the authority has barred e-commerce marketplaces like Amazon and Flipkart to sell products from companies which they own (fully or partially in terms of equity stake). And further, those sites are not allowed to enter into specific deals with sellers which allows them to make exclusive deals on their platforms.
Further rules relating to cashback, it is said that these e-commerce sites should be impartial in giving cashbacks to consumers, thus irrespective to their affiliate products.
This move is initiated by All India Online Vendors Association (AIOVA) had filed a petition in October with the anti-trust body Competition Commission of India (CCI) against Amazon and recently, Flipkart. This could now help small traders to fight back with their own set-prices.
While Amazon said it’s investigating the new reform, Flipkart hasn’t responded yet. But surprisingly, Snapdeal seems to welcome the rule heartily, according to its CEO Bahl’s tweet yesterday.
All in all, there might be no products like Amazon Alexa or Echo Dot or other discounted Xiaomi phones online. Seems the only last chance for them and you could be the coming festival, Pongal. Get ready to jump in!