Cheap and affordable shopping along with good online deals may soon vanish from our favourite online shopping platforms due to the new government policy. The government is proposing a policy which aims at ensuring a level playing field to local businesses in a market where rich foreign players invest heavily.
In order to regulate the e-commerce sector, the draft e-commerce policy has proposed that heavy discounts must be stopped. According to reports, e-commerce platforms like Amazon and Flipkart practice the “deep discounting” policy in order to lower the product prices on their platforms. The policy is first of its kind and will also reportedly cover food delivery portals like Zomato and Swiggy. Other online service providers to face the regulations will be UrbanClap, Policybazaar and even PayTM.
One of the draft policy’s vital elements will be the plan to check discounts, which will affect the consumers. Although the e-commerce companies claim that they get the discounts from the sellers and not the online platforms, the executives disagree. They acknowledged that an element of discounts resulted in a huge cash infusion to withstand the operations.
In order to not violate global trade agreements, the government is seeking ways to back the Indian e-commerce companies. It might include promoting the e-commerce players by following China’s steps of giving them incentives. The government is also looking to engage major internet platforms to see if some sort of preference could be given to local companies on websites in the country. The government doesn’t want international companies to overpower local players and is looking if more laws are needed for the same.
There is also a prediction of a special law for local players who sell made-in-India products, reports stated. The new law will allow an “inventory-based” model instead of the common selling through a marketplace. Reportedly, Here the companies will directly sell to their customers with up to 49% FDI all.
How shoppers react
Online shoppers gave mixed reactions when asked how they felt about the change. A fan of online deals, shopper Sahil Mathur said that this change is going to affect the online market both negatively and positively. “From electronic accessories to shoes and clothing, these past years have seen a great deal of growth in the online shopping industry. These days we can literally buy anything online with a few swipes in our cell phones,” he said.
“I believe that greater the discount, higher is the probability of the product being of an inferior quality. Some deals that lie between 70-80% seem pointless because that’s how they clear out the old stock. I usually prefer to get accessories like earphones and pen-drives among others online and sometimes basic stuff when there’s a reasonable sale on huge brands like Nike, Puma, and other niche brands,” he added.
“I think the government should allow the sites to still introduce great discounts even for a few days so that branded and good quality products are available to all,” concluded Sahil.
On the other hand, Disha Chopra, another online shopper doesn’t quite dislike the change. “The whole problem that will be faced in this situation is that the sellers will have to show the real price, as their discounted prices are not really discounted for most items,” she said.
“These e-commerce giants like Amazon simply woo the customers by showing off excessive discounts on multiple products, when the original price is not very different from their supposedly discounted prices. I believe this change is just going to bring out the real side of these portals, which is in a way good for the customers,” Disha added.
Reports stated that there is no timeline for the release of the final policy, so only time can tell how major a change is to be witnessed.