The FDI changes in ecommerce policy came into effect from February 1.
According to the new guidelines, ecommerce marketplaces will not be allowed to sell products in which they own a stake.
Some of the other major changes include:
- Ecommerce companies are allowed to do transactions with sellers only on a B2B basis
- Ecommerce marketplaces will not exercise ownership or control over the inventory
- Cash back provided by group companies of marketplace entity to buyers shall be fair
- Etailers are not allowed to mandate any seller to sell any product exclusively on its platform
- Bar sellers who drive more than 25% of the etailers overall sales from a single marketplace as entities
Following the implementation of the new rules, Amazon & Flipkart together lost $50 Bn in market capitalisation this week.
Amazon & Flipkart together lost $50 Bn in market capitalisation this week.
Amazon’s shares fell by 5.38% to $1,626.23, losing $45.22 Bn, Walmart’s share price fell by 2.06% to $93.86 on the New York Stock Exchange, losing $5.7 Bn in market capitalisation.
Amazon India has also removed all the product listings from its preferred sellers such as Cloudtail and Appario Retail in India to comply with the rulings.
removed all the product listings from its preferred sellers such as Cloudtail and Appario Retail in India to comply with the rulings.
During Amazon’s earnings call, Amazon’s CFO Brian Olsavsky had said that the company was uncertain about the impact that these new rules would have on the ecommerce sector and is currently analysing the situation to comply with the new rules.