India’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 last
Cliff Owen, AP
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- E-commerce giants
Flipkartand Amazonare teaming up to garner support against the Indian government’s new e-commerce policy that will come into effect on February 1.
- If the policy is implemented the ‘Republic Day’ sale on January 26 will probably be the last ‘big sale’ that both companies will be able to offer.
- Industry moderators like the Confederation of Indian Industry (CII) and the Federation of Indian Chamber of Commerce and Industry (FICCI) are being lined up as allies to help lobby support.
- Investment stakeholders like SoftBank, Tiger Global, Sequoia and Naspers are also reportedly being pulled into the loop.
Investment companies like SoftBank, Tiger Global, Sequoia and Naspers are also reportedly being pulled into the loop in order to get the Indian government to relax the new directives.
On the other side of the table are organisations like the Confederation of All India Traders (CAIT) and Swadeshi Jagran Manch that have been pulling pressure on the Indian government to keep the interests of local traders in mind.
If the new e-commerce is truly implemented on February 1, then the ‘Republic Day’ sale will probably be the last ‘big sale’ by Amazon and Flipkart until they’re able to reconfigure their supply chain.
It’s not leveling the playing field — only removing competition
The report cites sources claiming that the new policy is a ‘populist’ and ‘titled’ e-commerce policy that is only being rolled in order to appease local traders since it’s right before the 2019 General Elections are set to take place in India.
Taking away the deep discounts that make the online giants are attractive online shopping market is only one part of the story.
The primary concern is that if the e-commerce giants are unable to sell through associated vendors, then they will have to completely revamp the way that their supply chain works — something that is easier said than done, especially since that’s Amazon and Flipkart’s modus operandi.
Experts that side with the e-commerce firms feel that they’re being targeted unfairly. Physical retailers also sell their private labels within the larger brand.
Mukesh Ambani’s Reliance Fresh sells ‘Reliance Select’ products and Aditya Birla’s More supermarket has ‘More Choice Superior’ items lining the shelves. Both brands also have e-portals where consumers can order these things online and have delivered to their doorstep.
Even Future Group’s Big Bazaar and Easyday outlets have their sub-brands readily available claiming superior quality at cheaper prices.
The larger implication is that if Amazon and Flipkart are forced to cut down on their business, then the direct and indirect jobs under their purview will also be at risk.