E-commerce sector in India is growing rapidly as many people come forward to make online purchases. People prefer online shopping over offline, because of various reasons like the convenience and a wide range of offers, discounts, and cash back.
As online shopping grows rapidly, the government has announced new e-commerce rules in December 2018 to tighten the e-commerce sector. The new law was announced by the Government to act on complaints from domestic retailers (Brick and Mortar Stores), that e-commerce companies like Flipkart and Amazon were eating up their market.
With these new rules, online shopping in India has changed for the better. In this blog, we will discuss the new rules, and how they affect companies, vendors, and customers.
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As per the new e-commerce rules, the e-commerce companies like Amazon and Flipkart which run marketplace platforms are not allowed to sell through companies, and of companies, in which they hold an equity stake.
This rule not only affects e-commerce companies like Amazon and Flipkart but, it will also impact customers who shop online. Once this rule is implemented, customers who used to enjoy huge discounts and cashbacks while shopping online will not be able to do the same.
Here is the reason why customers will not be able to enjoy cashbacks and discounts while shopping online:
Some wholesale companies which purchase goods and products from manufacturers at low rates, are owned by e-commerce majors Amazon and Flipkart. These wholesale companies sell the products bought at cheap prices to select sellers on the platforms. These select sellers are the companies where e-commerce platforms have an equity stake.
There is a cap of 25% on sellers who buy products from the wholesale companies owned by Amazon and Flipkart. This means the sellers have to buy the remaining 75% of their products from other sources. This will lead to an increase in costs and sellers will stop offering huge discounts.
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The new rules issued by the government have questioned the non-discriminatory selling practices concerning cashbacks. Once the rule is implemented, sellers will not be allowed to offer individual cashbacks.
According to new rules, the exclusive deals between the e-commerce platforms and sellers are no longer possible. Now, Flipkart-Xiomi and Amazon-One Plus deals will no longer happen after February 1st. Under this deal, shoppers were given exclusive discounts on shopping a certain product on a particular e-commerce platform.
The e-commerce majors Flipkart and Amazon offer services like super fast delivery, early access to sales and other benefits to select users. This might be considered discriminatory and people who were availing these offers, won't be able to get them in the future.
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