Emails (Others): E COMMERCE POLICY is " IN FOR A SPIN "

Wednesday, 30 January 2019

E COMMERCE POLICY is " IN FOR A SPIN "

Innovation Nation ?

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A few days back , I blogged :

Weave a Wondrous Web [ W3 ] ( 20 Jan 2019 )

Then saw following news report in today’s Economic Times :

It's sale as usual: Amazon, Flipkart tell online-only companies

Extract :

Government Norm re Exclusivity :

The norms specify that any ecommerce marketplace entity will not MANDATE any seller to sell any product exclusively on its platform

Marketplace Innovation :

· ……….while they can’t mandate exclusivity , the brands can still be exclusive to them as they are free to adopt their channel and sales strategy

· A rewording of the pacts that the companies have entered into with the marketplaces or the sellers would be required to make it clear the brands are exclusive to the platform as part of their sales strategy and the market place has no role in it

· As part of this, Flipkart has already replaced the phrase ( #Only on Flipkart ) for the exclusive brands or products prominently displayed on its marketplace with ( # Just Here )

· Amazon, too , has started to downplay the “ Amazon Exclusive “ tag displayed for the exclusive brands or models on its marketplace

· All these changes are to ensure the onus of exclusivity lies on the brand rather than the marketplace

Government Norm re Inventory :

Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25 % of purchases of such vendor are from the marketplace entity or its group companies

Marketplace Innovation :

· An executive said Flipkart has informed exclusive partners that it will appoint multiple sellers for these brands instead of one, as is done now, to comply with the 25 % clause . Flipkart executives will also distance themselves from the planning of sales strategy for these brands

· Amazon has already started such a process where it distances itself from any sales promotion planning of the brands . All such activities are now done by the seller team

As Americans would say : “ You ain’t seen nothing so far “

In my above-mentioned blog ( sent as email to Cabinet Ministers – NITI Aayog – DIPP etc ) , I wrote :

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It is simply impossible to structure a “ E Commerce Policy “ which can address 39.92 million permutations / combinations of all the variables of E Commerce “ Business Structures “ and “ Business Processes “ !

So , how will the E Commerce game get played out ?

I imagined one possible “ permutation “ as follows :

* Holding Company and Subsidiary company Reliance Retail Ltd ( RRL )

· A “ Cooperative “ of 4 million Kirana Shops ( ala AMUL ) – KIRIL

· Cooperative holding “ non-transferable / non-voting “ shares in RRL

· Holding Company giving loans to Kirana Shops to buy shares of KIRIL

· Manufacturers of Consumer Goods launching “ E Com Platform “

· 4 million Kirana shops listing their inventory on this “ E Com Platform “

And here are some “ legit “ ways to overcome those hurdles placed by DIPP :

· Instead of E Com platforms offering discounts , Banks / Credit Card Companies / Mobile Wallet companies etc to offer “ Discounts “

· Logistics / Delivery companies to offer “ FREE DELIVERY “

· Manufacturers to make “ Exchange Offers “

· Instead of calling it “ Cash Back “ , just say “ 50 % off “ or “ Today’s Price “

I choose to envision the following :

· “ E Commerce is as elusive as an molecule of Air “ , that travels freely around the Earth – and unstoppable by national boundaries or un-implementable laws ?

Neither its Origin , nor its Destination will be apparent !

· Someday soon , everything will be displayed and sold “ Online “

· The only sensible ways is to treat “ E Commerce “ as a “ Traditional Commerce without bothering to define its “Business Structures” and “ Business Processes” ?

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But then world over , government officers are :

· Trained to “ re-act “ to a situation rather than address it “ pro-actively “

· Punished if a “ bold / out-of-the-box / honest “ decision proves wrong in hindsight !

Given this background, technological and business innovations of E Commerce platforms ( Foreign or Domestic ) , will keep 2 steps ahead of the government regulations !

References :

3 Laws of E - Commerce [ 04 Dec 2017 ]