February 27, 2019 By King
Online shoppers are facing the heat of the new foreign direct investment (FDI) policy on ecommerce which came into effect on February 1, as e-tailers restructured their operations and removed millions of products from their websites.
Amazon has been the most impacted e-tailer since it holds a stake in seller entities such as Cloudtail and Appario and a 5 percent stake in Shoppers Stop, all of which have been taken off from Amazon.in’s platform.
Amazon.in also removed around 1.7 million products, including mobile accessories and batteries, from its platform.
Amazon’s rival, Walmart-backed Flipkart also facing the heat as the company had to undertake massive restructuring of their operations in India to ensure compliance.
The new rules, which came into effect from February 1, bar online marketplaces that have foreign investments from offering products of sellers in which they hold a stake and ban exclusive marketing arrangements.
Another clause states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 percent of the vendor’s purchases are from the marketplace entity, including the latter’s wholesale unit.