- After issuing its new e-commerce policy in December, the Indian government is walking back on its words.
- Online retailers — Amazon and Flipkart — will still be able to sell their own private brands on the e-commerce platforms.
- This should come as a relief since their plans going forward reportedly heaving depended on their own private labels including the Alexa powered Amazon Echo devices.
- The new clarification has come under attack citing that the industrial governing body is just ‘losing guts’ in backtracking from its original stance.
Amazon and Flipkart teamed up to
aggressively voice their concerns against the
new e-commerce policy that the Indian government rolled out on December 26.
Their efforts seem to have paid off with the India government
flip-flopping to say that the brands can still sell products by associated private labels.
This means that products like the Amazon Echo and the Kindle as well as Flipkart items from MarQ, SmartBuy and Perfect Homes will still be available online.
Both e-commerce giants had plans to
increase focus on their private labels, which offer higher margins and contribute towards the company's’ gross sales.
Consumers also reportedly prefer the private labels since the products are 20-30% cheaper than other branded products according to Adarsh Menon, the head of private labels at Flipkart.
Amazon, following Flipkart’s playbook, also
has plans of scaling up its operations to include private labels that cover new categories. Between 2017 and 2018, it
more than doubled the number of products under its private labels from 15,000 to 43,000.
The Indian government taking back its own words
The original policy stated that e-commerce marketplace entities could not sell products by private labels where it could control the inventory or where it had a stake in it the associated company.
‘Clarifying’ the implication of that, the Department of Industrial Policy and Promotion (DIPP) issued another statement on Thursday.
“Concerns have been raised that press note 2 (2018) prohibits sale of private label products through the marketplace. It is clarified that the present policy does not impose any restriction on the nature of products which can be sold on the marketplace.”
DIPP
While the government has refused to comment to why they took a complete u-turn from what was clearly stated in the original policy, they assert that this is their final legal stand.
The domestic trade body, Confederation of All India Traders (CAIT), is particularly ashen. Their National Secretary General Praveen Khandelwal stated, “The new clarification note is a simple stupid confusion or losing guts and backtracking.”
See also:
The Indian government just dealt a serious surprise to Amazon and Flipkart — Here’s what that means for online shoppersIndia’s new e-commerce policy has rivals Flipkart and Amazon teaming up to counter the new directive — and the ‘Republic Day’ sale will probably be their lastAmazon, Walmart seek US help against India’s new draft E-commerce Policy
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