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The new e-commerce rules were drafted after small traders and physical store owners complained that major online marketplaces were partial.
The small traders in India have been complaining against the foreign e-commerce giants till now. However, the proposed new e-commerce rules could see two Indian giants Reliance Industries and Tata Group on opposite sides.
Mukesh Ambani-led behemoth Reliance Industries has sided with the Central government and is also of the opinion that a business entity must not onboard its related parties or associates on their platforms as sellers, Business Standard reported on Friday. This puts Reliance Industries on the opposite of Tata Group, which is against the new e-commerce policy of the Centre.
Salt-to-software conglomerate Tata Group has opposed the Centre’s move of banning e-commerce companies from doing business with associated parties. Tata is currently developing a super app and recently told the government that if this policy is executed, it won’t be able to sell products of Starbucks on its online marketplace. Starbucks India is a joint venture between Tata Consumer Products and Starbucks Corp. Even other brands like Croma, Voltas or Titan will meet the same fate and Tata-owned marketplace websites won’t be able to sell them as well.
Commerce and industry minister Piyush Goyal had recently lashed out at the Tata Group at an event of the Confederation of Indian Industry (CII) for opposing the Centre’s e-commerce draft.
RIL to tweak its business model for compliance
Jio Mart, the online retail business of Reliance, will be hosting products of only third-party sellers on its marketplace platform, according to the Business Standard report. The group has also communicated its view to the ministry of consumer affairs. However, Reliance will need to modify its marketplace model if it wants to fully comply with the e-commerce rules as it currently sells products owned by its associated companies.
Reliance may have two super apps- one potential marketplace serving only third-party sellers, while the other could be a group of inventory-based businesses with zero restrictions on related parties, the media report mentioned.
The draft e-commerce rules are aimed at providing level playing to Indian entities compared to the foreign players. The new e-commerce rules were drafted after small traders and physical store owners complained that major online marketplaces were partial and promoted only a few sellers on their platforms. In addition to this, allegations of practices to stifle completion were also made against many e-commerce companies.