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Industry opposes suggestion to exclude Amazon, Flipkart etc from key ecommerce responsibilities

dippCertain rules suggested by the government of India for possible inclusion in its upcoming e-commerce policy have drawn opposition from industry bodies. Key among these are the conditions that payment collection, packing and delivery should be made the responsibility of the seller and not the intermediary website (such as Flipkart and Amazon).

The Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce and Industry has sought feedback from stakeholders on whether platform owners like Amazon, Flipart and so on should be excluded from collecting payments, and also from the responsibility of delivering the goods.

At present, payments for online retail are collected by the websites (such as Snapdeal and Flipkart) and not by the seller directly. These payments are subsequently passed on to the seller, who may be a small shop in a remote town.

Similarly, Amazon and others offer a facility of storing, dispatching and delivering goods sold by the seller on the seller’s behalf. This is key to ‘speed of delivery’, and helps cut down time required to fulfill e-commerce transactions in India.

If a consumer orders an item from Flipkart or Amazon, and delivery is not done, it is the responsibility of the website to refund the money to the consumer. Accepting the DIPP suggestion would mean that the website has not such responsibility.

In fact, the primary reason why most people buy goods online is the delivery and quality assurance provided by websites like Amazon and Flipkart. If they are prevented from giving any such assurance, very few people would trust small-town sellers who flaunt their wares on these websites.

In such cases, only reputed sellers, such as WS Retail and Cloudtail, would be able to sell their wares on ecommerce websites, and small sellers will be forced to more or less shut shop.

Another similar touchy subject is user data being made the ‘sole’ property of the seller. The DIPP has asked if “data of consumers should be sole property of seller and not of the website owner.”

Making data the ‘sole property’ of the seller could result in unscrupulous traders from small towns getting access to sensitive information about buyers, including credit card details. At present, small traders in remote towns do not get hold of such sensitive data as these are not passed on to them by Amazon and other platforms.

The DIPP has also asked stakeholders to comment on what kind of conditions should be imposed on warehousing services offered by big e-commerce platforms.

Some industry associations have already opposed some of these suggestions.

On the issue of consumers’ private data being made the ‘sole property of the seller’, industry body Assocham said:

“The information of the customers includes his sensitive information like his credit card details, bank account details which he might not like to share with all. Further, micro, small and medium enterprises (sellers) may not have adequate knowledge and expertise of Data Protection as per the law of the land,” it said in its suggestions to the MoCI.

Similarly, it opposed the suggestion that platforms like Snapdeal, Flipkart and Amazon should not be allowed to collect payments or help in the delivery of the goods.

eCommerce marketplace provider is facilitator who enables the MSME’s who are very small and scattered, to find nation wide consumers. They do not have market intelligence; no brand and credibility; no financial wherewithal to travel sometimes even beyond their town leave aside across the country; no logistics support to transport individual products. The marketplace provider provides the MSME with all of these.

Therefore ASSOCHAM suggests that it should be left between the seller and marketplace provider to decide who will pack and deliver the goods.

“Largely, the sellers comprise of small and medium enterprises which have limited knowledge, risk taking capabilities, risk calculating capabilities and they may only know their own language.

“Therefore it will become difficult for them to collect the payment from all the buyers across the country, where a marketplace service provider is the enabler and the facilitator with adequate know how.

“A marketplace provider undertakes this risk, as the guarantor collects payment of the sellers and remit them the amount as per the RBI guidelines, Payment and Settlement Act,” it noted.

On the issue of forcing sellers to deliver their products themselves, it pointed out: “eCommerce marketplace provider is facilitator who enables the MSME’s who are very small and scattered, to find nation wide consumers. They do not have market intelligence; no brand and credibility; no financial wherewithal to travel sometimes even beyond their town leave aside across the country; no logistics support to transport individual products. The marketplace provider provides the MSME with all of these.”

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