Products go off platform as e-biz companies realign ops
E-commerce giants scurried to realign their platforms to comply with the new rules that came into effect on Friday, with Amazon removing several products from its platform. The rules bar e-firms with foreign investments from offering products of sellers in which they hold stake.
NEW DELHI: E-commerce giants like Amazon and Walmartbacked Flipkart scurried to realign their platforms to comply with the new FDI rules that came into effect Friday, with Amazon.in removing a number of products, including mobile accessories and batteries, from its platform.
The new rules bar online marketplaces that have foreign investments from offering products of sellers in which they hold stake. Accordingly, products from sellers like Cloudtail and Appario - that have equity investment from Amazon - have been taken off from Amazon’s platform.
A quick search for various products from ‘AmazonBasics’ showed that the items were “currently unavailable”. Other Amazon products like Echo range of smart speakers were initially taken off, but later returned on the platform through sellers like Hariom Communication.
The wait period for Echo speakers is now running anywhere between a fortnight to over a month. Previously, some of these products were available for delivery within a day or two.
According to sources, while Flipkart doesn’t hold equity interest in its sellers, the changed rules could affect selection available on the platform in the coming weeks as existing sellers do procure items from its wholesale unit. Industry experts pointed out that many partnerships between these e-commerce giants and their sellers are being tweaked to ensure that the online marketplaces are in compliance with the new rules.
The new regulations - that were announced in December under Press Note 2 - bar online marketplaces with foreign investments to enter into exclusive marketing arrangements. Another clause states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 per cent of the vendor’s purchases are from the marketplace entity, including the latter’s wholesale unit.
US retail giant Walmartbacked Flipkart, earlier on Friday, said it is disappointed with the Indian government’ s decision. The Flip kart spokesperson said despite the significant work required to change its supply chains and systems, the company remains confident that it will continue to serve its customers and sellers well. An Amazon spokesperson Thursday stated that the company will continue to engage with the government to seek clarifications and work towards minimising impact on its customers and sellers.