Business Companies 29 Jan 2019 Snapdeal backs India ...

Snapdeal backs India’s curbs

REUTERS
Published Jan 29, 2019, 6:23 am IST
Updated Jan 29, 2019, 6:23 am IST
It did not name any companies in its letter, but said “the loud protests” by some firms was an “indication of how effective this regulation” will be.
n The rules came after small traders complained that online retailers used their control over inventory from their affiliates to create an unfair marketplace that allowed them to sell some products at lower prices.
 n The rules came after small traders complained that online retailers used their control over inventory from their affiliates to create an unfair marketplace that allowed them to sell some products at lower prices.

New Delhi: Even as India’s new e-commerce curbs sting Amazon and Flipkart, their local rival Snapdeal is cheering the move.

India will from Feb. 1 impose restrictions on how e-commerce firms operate, including barring them from selling products from firms in which they have an equity interest, leading to protests from Amazon and Flipkart.

 

In a letter dated Jan. 25, Snapdeal, which is backed by Japan’s SoftBank, told the federal government that some companies were using “glaring loopholes” to run a proxy inventory-based model of e-commerce.

It did not name any companies in its letter, but said “the loud protests” by some firms was an “indication of how effective this regulation” will be.

The move has jeopardised Amazon and Flipkart’s plans to tap the e-commerce market as it would require them to rethink their existing business structures and raise compliance costs, industry sources have said.

The rules came after India’s small traders complained that online retailers used their control over inventory from their affiliates to create an unfair marketplace that allowed them to sell some products at lower prices. Such arrangements would be barred under the new policy. “The timelines allowed are adequate for compliance,” Snapdeal’s Chief Executive Kunal Bahl wrote in a letter to India’s commerce minister, which was seen by Reuters.

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