Traders resent RIL bid to enter e-commerce

Traders resent RIL bid to enter e-commerce
Traders resent RIL bid to enter e-commerce

Traders, who have been critical of the operations of FDI-funded multi-national e-commerce biggies, are not happy about the entry of Reliance Industries either. They want rules to be applicable alike for both multinationals and domestic players.

However, the industry reckons that it would be tougher to get the new norms eased for multinational players, with Reliance announcing its foray into the e-commerce sector.

The current regulations and norms in the e-commerce space are mostly meant for the FDI-funded entities. These may not be applicable for Reliance, as it does not need FDI to fund its e-commerce venture.

“Whosoever launches an e-commerce portal, it should be based on fair fundamentals and not on malpractices, which includes predatory pricing, deep discounting, loss funding or exclusivity. We have seen in the past that big corporate houses are more interested in generating profits rather than serving as a strong conduit of supply chain,” said the Confederation of All-India Traders (Cait).

Traders also have asked the government to ensure that domestic players do not get any undue advantage. They also want a level-playing field for all e-commerce players.

“Taking a futuristic view, we have demanded the government that all those restrictions on FDI-funded e-commerce players should be imposed on domestic players also to ensure a level-playing field and fair competition in e-commerce market.  Domestic players should not take any undue advantage and not harm or adversely affect the business of small traders both offline and online,” said Praveen Khandelwal, secretary general, Cait.

Traders find that in the current circumstances, formation of a regulatory authority for e-commerce has become all the more necessary. “It will regulate and monitor the e-commerce market. The genuine interests of the small traders also have to be protected from the onslaught of big corporate houses and multi-national companies,” he added.

With Reliance announcing its e-commerce entry by May, the industry is sceptical about any relaxation of the recently tightened norms for the FDI-funded players.
Reliance’s announcement has come just two weeks after the government clarified the foreign direct investment policy and added and few more norms, making it tougher for the biggies to operate.

“Considering the turn of events, the government is not likely to change the tightened norms for FDI-funded e-commerce players. It may give some more time for compliance as the policy was made without consulting the industry and the players were given just one-month time. Further, a broader e-commerce policy is on the anvil. Probably the government may come out with newer norms in the policy,” said an industry expert.

E-commerce players are informally engaging with the government to get clarity on the norms. According to them, there is much confusion regarding some of the provisions. However, they have not started implementing the new norms. They are hopeful of getting an extension. “In order to bring out a right policy, it is important to get into a meaningful discussion with all the stakeholders, understand the demands of the customer and look at the larger interest of the country. Flouting these will tarnish the image of the country in terms of policy stability,” said Anil Kumar, founder and CEO of RedSeer Consulting.

Industry watchers too apprehend that a formidable player like Reliance will deprive the FDI-funded players a of level-playing field.  “Reliance has several advantages compared to other players in terms of telecom and retail reach and possession of data apart from money to make big investments,” said Rahul Sethi, an e-commerce industry veteran.

Reliance Jio has a subscriber base of 250 million and even if a part of these subscribers is buying from Amazon or Flipkart, it has the data of their purchases. Reliance will just have to mine the data to understand the customer behaviour and trends. Getting them to shop in its portal will not be difficult for the company.

“When Amazon or Flipkart have to place expensive advertisements in mass media, Reliance can reach out to the customer directly through the mobile network. This saves cost on advertisement and marketing. Given the coverage of Reliance retail, warehousing too is taken care of,” said Sethi. However, Reliance will have to work on last mile delivery and provide better delivery experience and that is how it can win over the customer.