The recently introduced e-commerce policy is unlikely to change the discounting model of online retailers in the near-term, says India Ratings and Research (Ind-Ra). According to the ratings agency, further clarity is essential for the successful regulation of the sector, implementation of the policy and achieving the desired objective to bring about a level playing field between offline and online retailers.
Ind-Ra also said the traditional offline retailers are unlikely to benefit as the policy is directed towards defining and limiting the scope of operations of e-commerce business. The policy aims to define and ring fence the marketplace operation activity of e-commerce players (e-tailers) and to distinguish the scope of marketplace and inventory based model as the Foreign Direct Investment (FDI) allowed for both the models is different, the report said.
The new guideline prohibits marketplace e-tailers from ownership of goods, and they can only act as facilitators between buyers and sellers and not influence the selling price of the goods.
This has been done “to discourage the deep discounting strategy adopted by e-tailers”, but in the absence of additional clarity on policy, adherence for the same will remain a challenge, Ind-Ra said. The e-tailers can continue to exploit the loopholes or adopt innovative strategies to extend deep discounts, till a stringent framework to prohibit and bring a level playing field with offline retailers is put in place, it added.