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Govt keeping check on e-commerce discounts

Companies are reworking their strategies to stay in market

Policy Pulse
Publish Date: Oct 1 2016 11:20AM | Updated Date: Oct 1 2016 2:54PM

Govt keeping check on e-commerce discounts

Government agencies are keeping check on offers, discounts and freebies handed out by e-tailers in view of festival season. Government asked various companies including Flipkart, Amazon, Snapdeal to refrain from discounting.

 

Government further stated in an official statement that rebate is being given by the seller and not online marketplace. This state has forced top e-marketplaces to adopt a cautious approach year. Companies are reworking their strategies to stay in market.

 

It was observed that the turnover during the festive sale in 2014 and 2015 was high and may be tough to match. Flipkart spokesperson said prices and discounts for its sales including Big Billion Days are decided by participating sellers and brands.

 

Amazon India vice-president (category management) Manish Tiwari said that, this year, sale will not be about pricing alone. "We have increased number of sellers on our platform by 200% over last Diwali and our operating capacity is 1.5 times of what it was last year," Tiwari said.

 

Change in strategy, between e-tailers with top government functionaries including commerce & industry minister Nirmala Sitharaman, suggests that rules need to be followed and discounts have to come from the sellers and not the marketplace. 

 

Officials from ED were also present in at least one of the meetings to indicate that any violation would be seen as a non-compliance with the foreign investment guidelines. This has prompted e-tailers to turn their focus on profitability.