Ease of Doing Business for MSMEs: The amendments proposed on Monday to Consumer Protection (E-commerce) Rules, which have been notified July last year, signalled stricter compliance for e-commerce firms such as Amazon, Walmart-owned Flipkart, and other people that have been beneath the continual regulatory radar more than alleged business enterprise malpractices by trade bodies. In truth, the Ministry of Consumer Affairs, Food & Public Distribution, announcing the proposed adjustments, in a statement on Monday categorically noted that that there was an “evident lack of regulatory oversight in e-commerce which required some urgent action”.
The draft guidelines have been in response to complaints from traders, associations, and shoppers against “widespread cheating and unfair trade practices being observed in the e-commerce ecosystem.” Indian e-commerce sector, which is seeing improved participation from India Inc’s heavyweights like Reliance, Tata, and so forth., has micro, tiny, and medium enterprise (MSME) sellers central to its development. The adjustments proposed to the Rules by the government also catered to such sellers who have been voicing alleged unfair therapy to them by e-commerce firms. Here’s a low-down on the proposed additions to the Rules by the government with respect to the seller neighborhood.
E-commerce firms enabling the sale of imported goods or services on the marketplace will have to provide a ranking for goods and make certain that the ranking parameters do not discriminate against domestic goods and sellers. The government had last year also stated that e-commerce entities will have to provide an explanation of the key parameters which, individually or collectively, are most substantial in figuring out the ranking of goods or sellers and the relative value of such parameters via an “easily and publicly available description drafted in plain and intelligible language.”
“While the intent of this law is clear, its implementation might be a challenge, given that products are served up in search queries that are quite different from each other. Ranking them in a consistent way might be difficult, and may not essentially give the signals to the consumer that it intends to provide,” Utkarsh Sinha, Managing Director, Bexley Advisors told TheSpuzz Online.
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The government also noted that the marketplace will be topic to a fallback liability in case its seller fails to provide the order due to “negligent conduct, omission or commission of any act by such seller in fulfilling the duties and liabilities” that causes loss to the customer. “In any business, there has to be some liability to make sure you do the best. If the govt doesn’t penalize the company, the company will do what it wants. Future is e-commerce and once you have committed to selling goods online, e-commerce players should have liability for it. We particularly don’t penalize sellers if the problem is genuine such as the product has gone bad or they don’t have stock. It is part of service industry to deal with such concerns,” Prateek Ruhail, Founder at organic beauty marketplace Vanity Wagon told TheSpuzz Online.
The draft maintained that sellers of a frequent category must not be treated differently by the logistics partners of e-commerce marketplaces. The logistics corporation will have to provide a disclaimer like terms and circumstances governing its relationship with sellers on the marketplace and, a description of any differentiated therapy which it offers or could possibly give involving sellers of the identical category.
“Parity with larger sellers, including those owned or co-owned by the e-commerce platform has long been a demand held by small traders. However, its implementation would be key as there are legitimate algorithmic cues – ranging from the price offered, the seller’s reputation, and their customer satisfaction ratings – that determine the positioning of a particular item on a search query,” added Sinha. Nonetheless, it is arguable that correct undifferentiated parity may perhaps really be detrimental for the customer, who has come to rely on the e-commerce platform to filter up the most suitable benefits, accounting for these components.
Every marketplace will have to make certain that none of its associated parties and linked enterprises are enlisted as sellers for sale to shoppers straight, the government proposed adding that marketplace must not sell goods or services to any individual who is registered as seller on its platform. “Prohibition of sale of goods at any marketplace by its related entities will be a game-changer as we have seen that so far the global e-commerce companies were controlling the sale through their preferred sellers. With this provision, the chances of having preferred sellers will be very bleak,” stated B.C.Bhartia, National President and Praveen Khandelwal, Secretary General, CAIT. The traders’ body represents 8 crore traders in India like these promoting on e-marketplaces.
The government also recommended that every single e-commerce marketplace will have to prominently show the name of the seller in the identical font size in its invoice as that of the e-commerce entity’s name. Separately, the government proposed that the invoice of every day order and the entity’s registration quantity with the Department for Promotion of Industry and Internal Trade (DPIIT) must be displayed prominently to customers in a clear and accessible manner on its platform.