[Good News] Government allows 100% FDI in marke...

[Good News] Government allows 100% FDI in market place model of e-commerce under automatic route

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The government today permitted 100 per cent FDI in the market place format of e-commerce retailing with a view to attract more foreign investments.

As per the guidelines issued by the Department of Industrial Policy and Promotion (DIPP) on FDI in e-commerce, foreign direct investment (FDI) has not been allowed in inventory-based model of e-commerce.

At present, global e-tailer giants like Amazon and Ebay are operating online marketplaces in India while homegrown players like Flipkart and Snapdeal have foreign investments even as there were no clear FDI guidelines on various online retail models.

To bring clarity, the DIPP has also come out with the definition of ‘e-commerce’, ‘inventory-based model’ and ‘market place model’.

Market place model of e-commerce means providing of an IT platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.

The inventory-based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to consumers directly, according to the guidelines.

A market place entity will be permitted to enter into transactions with sellers registered on its platform on business-to-business basis, DIPP said.

It said that an e-commerce firm, however, will not be permitted to sell more than 25 per cent of the sales affected through its market place from one vendor or their group companies.

“In order to provide clarity to the extant policy, guidelines for FDI on e-commerce sector have been formulated,” DIPP said.

The government has already allowed 100 per cent FDI in business-to-business (B2B) e-commerce. .

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The government today permitted 100 percent FDI in the market place format of e-commerce retailing with a view to attract more foreign investments.

As per the guidelines issued by the Department of Industrial Policy and Promotion (DIPP) on FDI in e-commerce, foreign direct investment (FDI) has not been allowed in inventory-based model of e-commerce.

At present, global e-tailer giants like Amazon and Ebay are operating online marketplaces in India while homegrown players like Flipkart and Snapdeal have foreign investments even as there were no clear FDI guidelines on various online retail models.

To bring clarity, the DIPP has also come out with the definition of ‘e-commerce’, ‘inventory-based model’ and ‘market place model’.

Market place model of e-commerce means providing of an IT platform by an e-commerce entity on a digital and electronic network to act as a facilitator between buyer and seller.

The inventory-based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to consumers directly, according to the guidelines.

A market place entity will be permitted to enter into transactions with sellers registered on its platform on business-to-business basis, DIPP said.

It said that an e-commerce firm, however, will not be permitted to sell more than 25 percent of the sales affected through its market place from one vendor or their group companies.

“In order to provide clarity to the extant policy, guidelines for FDI on e-commerce sector have been formulated,” DIPP said.

The government has already allowed 100 percent FDI in business-to-business (B2B) e-commerce.

http://m.moneycontrol.com/news/current-affairs/...

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VU https://cdn2.desidime.com/assets/textile-editor/icon_wink.gif

Refer friend decorative type lettering design 53514634
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100% FDI IN e commerce — Means We will Loot These Companies for a Year then These Companies will Looot Us Forever

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@refer wrote:

100% FDI IN e commerce — Means We will Loot These Companies for a Year then These Companies will Looot Us Forever


no. 100% FDI means we can loot for ever. more funding = more looting

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@pentiumd wrote:

@refer wrote:

100% FDI IN e commerce — Means We will Loot These Companies for a Year then These Companies will Looot Us Forever


no. 100% FDI means we can loot for ever. more funding = more looting


I dont C any march Madness this year Y ?

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because crazy madness sale is coming soon https://cdn2.desidime.com/assets/textile-editor/icon_smile.gif

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another angle


100% FDI in e-commerce marketplaces: Days of huge online discounts may soon end

next time you turn online for a big discount, chances are, you will come away empty-handed. The government’s new e-commerce policy that has opened the gates for 100% foreign direct investment (FDI) in B2C online marketplace, restricts e-commerce companies from directly or indirectly influencing the sale price of goods on online marketplaces.

This could mean, no more jaw-dropping discounts on smartphones or televisions — or at least, online prices will be on a par with what your neighbourhood retailer offers. “This was needed. They will now not only stop giving huge discounts but also perhaps not advertise openly about big sale days. This will call for change of business model,” said Kishore Biyani, CEO of Future Group that runs the country’s largest brick-and-mortar retail company.

For instance, till last year, Alibaba-backed e-commerce company Paytm was burning around $15 million a month to offer discounts and expand ope rations. “They have been using interest-free investor money for predatory pricing,” said Praveen Khandelwal, secretary general for Confederation of All India Traders (CAIT), an umbrella body for small traders. “How can we compete against them by borrowing money from banks at more than 12% interest?” Online marketplaces such as Flipkart created ripples in the domestic retail industry last year with its sales days such as `Big Billion Days’ that saw the Bengaluru-based company sell around a million products in 10 hours and rake in around Rs 651 crore in just 19 hours.

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Earlier, companies such as Samsung and Sony, among others, were trying to work their way around discounting on online sites. Samsung even witnessed a large number of its brick-and-mortar retailers coming together to stage a protest against predatory pricing of the company’s products online. “The deep discounts not only soured our relationship with our partners but also did not help our brand image,” said a senior Samsung India executive.
Despite new dos and don’ts, experts said e-tailers will find their way around these restrictions. “There can be a lot of ways in which you can reward the customer apart from offering direct discounts. For instance, you can offer schemes and cashbacks,” said Amarjeet Singh, partner-tax, KPMG India.

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@disclaimer wrote:

Full story
http://dipp.nic.in/English/acts_rules/Press_Not...

Cause of concern
Post sales, delivery of goods to the customers and customer satisfaction will be responsibility of the seller.


Well, should they re-think!?

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@hese wrote:

@disclaimer wrote:

Full story
http://dipp.nic.in/English/acts_rules/Press_Not...

Cause of concern
Post sales, delivery of goods to the customers and customer satisfaction will be responsibility of the seller.


Well, should they re-think!?


Offline retailers’ lobby would try their best to not let it happen.

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@hese wrote:

@disclaimer wrote:

Full story
http://dipp.nic.in/English/acts_rules/Press_Not...

Cause of concern
Post sales, delivery of goods to the customers and customer satisfaction will be responsibility of the seller.


Well, should they re-think!?


Also, An e-commerce entity will not permit more than 25% of the sales affected through its marketplace from one vendor or their group companies, Cloudtail worst hit

Maybe time to change the title https://cdn1.desidime.com/assets/textile-editor/icon_biggrin.gif

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nice

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The only loophole is cash backs while keeping prices high, which are not directly covered in the guidelines. Otherwise, its the end of the party.

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@panchabhut wrote:

The only loophole is cash backs while keeping prices high, which are not directly covered in the guidelines. Otherwise, its the end of the party.


Yes, government policy making can’t match the pace at which the industry comes up with innovations to make the scenario favorable for itself. Next policy review would take years.

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