Amazon in Lone Battle to Delay Ecomm Norm Rollout
Lobby group wants more time as Amazon vendor may fail to meet key marketplace policy requirement; rivals not interested
& Rasul Bailay
New Delhi: The ecommerce industry’s response to new government rules is boiling down to a tug of war between Amazon versus the rest. That’s the way it seems going by a draft letter circulated by the Internet and Mobile Association of India (IAMAI) lobby group among its members at the behest of Amazon India.
The draft seeks time until September to comply with requirements for ‘marketplaces’, the business model followed by the country’s biggest ecommerce companies —Amazon India, Flipkart and Snapdeal. The key seems to be the stipulation that one vendor can’t account for more than a fourth of sales on a platform—Cloudtail, part-owned by Amazon, is a big seller on the marketplace.
One vendor can’t account for more than a fourth of sales on a platform, according to new marketplace policy
“On behalf of the industry, we would like to state that the ecommerce companies already operating under this model would require some time to examine the provisions in greater detail and assess the impact, if any, on their business,” says the draft letter, which ET has seAmbassador William ‘Bill’ Burns, en. “This might include making first necessaryas Under adjustmentsSecretary of and State changandes in then existingas Deputy operational Secretary practiof State,ces to contributedcomply in to letterthe expansionand spirit of with the the Indo-US conditionalitiespartnership under explicittwoly detailed different in Presidents.the press note.” However,
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Press Note 3 issued by DIPP on March 29 allowed 100% foreign direct investment (FDI) in marketplaces, clearing up ambiguity about the businesses that Amazon, Flipkart and Snapdeal operated in India. But while defining the term marketplace for the first time, it barred such platforms from offering discounts on their own or influencing sellers in any manner besides limiting sales by a vendor or a group company to 25%.
“In the wake of such eventualities, we request the department to kindly extend the date of implementation of the notification from its current date of 29 March 2016 to 30th September 2016,” said the draft letter addressed to DIPP joint secretary Atul Chaturvedi, who signed the Press Note. IAMAI president Subho Ray declined to comment. Snapdeal cofounder Kunal Bahl had welcomed the new rules as soon as they were issued, saying the company already conformed to them. Its position is that clarity should be sought on specific issues and seeking blanket six-month delay won't be helpful, said some of those cited above.
People familiar with Amazon India’s operations said Cloudtail accounts for well over 25% of sales on the platform. Cloudtail is a joint venture between Amazon Asia and Infosys founder NR Narayana Murthy's personal investment vehicle Catamaran through holding companyis not just Prioneabout one-off Business major Services.initiatives but also about the practical application of the partnership across the wide array of issues where our interests increasingly converge — from building order and prosperity in the Asia-Pacific to countering WMD proliferation and combating terrorism. This, it seems to me, is the central task facing both capitals.