For long Amazon has enjoyed an unprecedented dominance in India’s e-commerce section. But new rules which came to effect on Friday changed everything for Amazon India, as the tech giant wouldn’t be able to dominate the market through its exclusive sales.
Who caused this challenge for Amazon India
Recently, India has revised its rule for e-commerce giant, that has affected Amazon and Flipkart This came in light of multiple complains from small business traders who say that Amazon India and other online sellers use their buying power. In this way these e-commerce companies control the inventory of affiliate vendors and establish an unfair market place which gives them the ability to offer discounts.
The traders have thanked the government for taking such a step and have requested an investigative team to be set up to check the business model of such e-commerce companies to ensure fair play
Amazon’s Response to the Rule
The new rule barred online retailers from selling products via vendors in which they have an equity interest or exclusively sell their products on their online platform. As a result One by one on Thursday Amazon India removed a wide range of it products including its exclusives like glasses and echo. Furthermore, the rule forced Amazon to stop services like amazon pantry, but items can still be bought, individual.
In a statement to the media, the Amazon India CFO Brian Olsavsky said “the situation is a bit fluid, but the country is a good long term opportunity. The company’s main goal is to minimize the new rules impact.” Last year in March Amazon was the worst sufferer after US Tech stocks well due to country’s trade war with China.
Flipkart another ecommerce giant in India also protested the rule along with Amazon. Wall mart an American competitor of Amazon just recently bought a major share in Flipkart.
What Is So Controversial About the New Rule
Many are saying the new rule has come in response to the upcoming election. Narinder Modhi did this to protect his vote bank and secure 25 million votes comprising of small shop owners.
Experts are of opinion that new FDI rule is sure to upset the flow of foreign investment as many investors prefer the exclusive sale of products on their platform. This helps them secure the market in a better manner.
How People Reacted to New Policy
India is a major market for the online sellers. So buyers’ response has not be so encouraging so far. People have shown great dismay in steps taken by the government. They say that Amazon had made their life so much easier and gave them more time to spend with the family rather than wasting time bargaining in the markets.
While others support the rule and say India should not buckle under the pressure.