Online shopping has taken a hit because the Indian government has changed its rules for companies like Amazon and Flipkart. What has brought about the change in e-commerce policies, that too just a few months before India goes into General Elections?
Online shoppers will have to contend with reduced selection, higher prices and disrupted customer experience while sellers will be unable to source wholesale merchandise at scale as e-commerce players come to terms with the changes.
Because of its marketplace model, Paytm has found it hard to make sure the sellers maintain quality and fulfillment response is also lacking.
He also says the government is not exactly discouraging investment, but wants tighter control for the sake of local sellers. Also, it’s not like the regulations have been created overnight. They have been there much before it came into the news. It’s just the decision to adopt it, less than 100 days before the elections, without any plea for extension being considered, has come as a jolt to the global giants.
He adds that while it’s easy to criticise the government for this decision, someone needed to put a check on the sort of business Amazon was running in the country.
The tighter rules, aimed at protecting small traders, may end up benefiting the country’s richest man, Mukesh Ambani, who is building a home-grown competitor.
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Technology & Innovation Research & Advisory firm. To read more about him, click here.
Have a question on this or other Technology & Innovation topics? Click here to set up an enquiry call with Sanchit Vir Gogia.
Copyright © 2019 Greyhound Research. All rights reserved. You may share this research note using the options made available. Please don’t copy this research note (complete or parts) and distribute over the web and emails. Connect with us if you need clarifications.