E-commerce Policy: What prompted Government to kill Flipkart and Amazon?

ecommerce policy

The home-grown Flipkart and US-based Amazon have been killed by the Government on February 1. As far as online shoppers are concerned, the day will be a black day for all the tech-savvy online shoppers who throng to these sites on a daily basis for deals and discounts. After the implementation of the e-commerce policy, customers took to social media and widely criticized the move by the Government to regulate e-commerce marketplaces. Going forward, you will not feel the same traditional experience as in the past due to the strict e-commerce policy.

The main point to note is that customers were always happy with the offerings provided by Flipkart and Amazon. They managed to purchase products with great quality at budget prices. The interesting point to note is that the e-commerce marketplaces were able to sell the items at discounted prices because there are no middlemen involved.

It’s the trader’s body which objected to both e-commerce companies. The Government has taken the step to please offline traders ahead of the 2019 General Elections. With the ruling party losing out power in four critical Hindi states, it is imperative for the Government to adopt a regressive stand in a bid to please offline traders.

After a detailed inspection of various articles and social media posts, we infer that few people like Ashwani Mahajan and the trader’s body associated with RSS are behind this undemocratic move. It’s absolutely sure that middlemen will rule the offline retail space and traders will start selling products at market rates. This will force customers to pay more than when compared with the e-commerce companies with steep hike in inflation.

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The Government of India formulated the new e-commerce policy and was rolled out on February 1. The policy envisages rigorous conditions including the way in which the e-commerce marketplaces should function. The Government has accused Flipkart and Amazon of violating the rules by creating a series of alpha sellers. Moreover, the e-commerce marketplaces are also accused of influencing the pricing system and giving discounts including cashbacks.

According to Morgan Stanley, Walmark is seriously considering to exit Flipkart. The US-based retail giant will most likely sell its stakes and exit India by the middle of 2018. The sources revealed to us that the company is not in favor of working with the new policy since it’s not beneficial for the company. The rules are framed in such a way that it will be difficult for the company to earn profits. If Walmart exits India, then the future of over 50000 employees will be under threat.

The employees should be prepared to face any eventuality because the management will find it difficult to proceed with the operations. The main reason is that Walmart is currently pumping funds for the company and it will stop. Hence, the management will find it tough to pay salaries. Amazon will also most likely face crunch but will be able to tide over the crisis with alternative routes.

It is to be noted that Snapdeal and Shopclues have welcomed the new e-commerce policy regulations. However, the number of sales from these companies are very low when compared with Flipkart and Amazon. Hence, the customers are not only affected but also deeply disappointed with the new e-commerce policy.

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The company is currently considering to convert the erstwhile Cloudtail and Appario into wholesale subsidiary entities. Hence, the company will be able to sell the products via other sellers. It remains to be seen as to how the companies will implement the new rules and regulations. The profitability of both Flipkart and Amazon have suffered because of the new guidelines. Moreover, the companies are unable to offer replacements for the items sold before January 31. The Government has killed Flipkart and Amazon. It remains to be seen as to whether people will abandon the current Government headed by Narendra Modi in May 2019. Let’s wait and watch.

Anand Narayanaswamy is the editor-in-chief of Netans. He was recognized as a Microsoft Most Valuable Professional (MVP) for 9 years (2002 to 2011) and currently part of MVP Reconnect program. He is also part of the prestigious ASPInsider program. Anand has published several articles and reviews related to various software and hardware products for various software and technology related websites. He is also active on social media and also participates as an Influencer for various brands. Anand can be reached at admin@netans.com

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