To serve consumer or hobble eCommerce? – The Economic Times

Clipped from: https://economictimes.indiatimes.com/opinion/et-editorial/to-serve-consumer-or-hobble-ecommerce/articleshow/83755851.cmsSynopsis

Banning flash sales would only rob consumers of discounts offered as part of marketing schemes. The suggestion that couriers cannot offer different rates for similar products ignores the reality of bulk discounts. It is a throwback to the licence raj, when babus thought they knew business best, and traders and industrialists were unreliable hucksters.

The proposed new rules for ecommerce meddle with and restrict, rather than protect, consumers, save in the case of private labels. The rules mandating ecommerce platforms to rank products and suggest alternatives would kill the business of many Indian startups that compare prices, review product quality and make recommendations, by making such business the basic responsibility of ecommerce. Banning flash sales would only rob consumers of discounts offered as part of marketing schemes. The suggestion that couriers cannot offer different rates for similar products ignores the reality of bulk discounts. It is a throwback to the licence raj, when babus thought they knew business best, and traders and industrialists were unreliable hucksters.

Banning all sales by companies in which ecommerce marketplaces have a stake would abort the very benefits large organised retail brings to the table: the benefit of scale, superior logistics and elimination of layers of distribution costs. Asking every ecommerce entity that operates in India to register with the government only restricts the Indian consumer, who might want to take advantage of the opportunities offered by digital trade to buy or sell something on a niche platform operating in some distant land and whose scale of operations in India does not warrant registration in the country. What is imported through such a channel has to clear customs and the government can obtain all the data it needs from that interface. There is, however, no harm in asking ecommerce companies above a turnover threshold to appoint grievance redressal and compliance officers.

Curbs on online retailers scaling up their private labels does make sense. In the US, Amazon was charged with using data gleaned from independent sellers on the company’s platform to develop competing products (car trunk organisers being a case in point). But private labels in commodities or the ecommerce platforms’ technological innovations should be fine. Provided the aim is to serve the consumer and not hobble ecommerce.

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