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Won't regulate e-tail market, says government

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Be it dry fruit for Diwali or dazzling deals on household wares on Dhanteras – all your festive shopping indulgences are just a click away with online retailers vying with one another to catch eyeballs of customers. Good news is that the online shopping carnival will continue as the government does not plan to impose any regulation on the sector as of now, unless consumers interests are compromised in any way.

Ending speculation about imminent regulations in the wake of alleged irregularities after Flipkart's Big Billion day sale earlier this month, a highly placed source in the finance ministry said, "It is not the government's job to regulate businesses in a free-market economy. However, unfair trade practices will not be spared."

After the Flipkart's Big Billion day, a group of organised retailers had approached the ministry of commerce accusing the portal of getting into the unfair trade practice of predatory prices. A commerce ministry official told dna, "Look, ultimately it is a contract between a buyer and a seller, and the government cannot do anything about it. A redressal mechanism is available if consumer interests are in any way compromised." On the Big Billion day, Flipkart clocked Rs 600 crore in the first 10 hours of the sale, thereby achieving the 24-hour target in less than half of the time.

Commerce minister Nirmala Sitharaman also said that no enquiry is being planned or proposed in the Big Billion day sales of Flipkart.

The US online major Amazon is now tapping the Dhanteras rush, and is offering a range of products from dry fruit hampers at 10-30% discount and home and kitchen ware deals of up to 65%. For example, Amazon offered 500 gram dry fruit gift box priced at Rs 1,350 at Rs 945 today – a discount of 30%. Amazon did not disclose the sales figures for the Dhanteras sales when contacted by dna.

Meanwhile, experts believe that the e-tailing business is an interesting alternative channel which is emerging. Though it will not attain the retail proportion, its presence will significantly grow in the next few years. Arvind Singhal, chairman and managing director, Technopak – a retail consultancy firm told dna, "The e-tailing is at a taking-off stage in India. The numbers are small compared with the overall spending. By 2020, the e-tail market will be just about $32 billion, which will be 3% of the overall retail market of $1,100 billion." According to Technopak, the current e-tail market in India is worth $2.3billion.

Mobile phone, especially smart phone penetration is the key game-changing event for the e-commerce business. "The increasing adoption of devices like smartphones, tablets and laptops, and access to the internet through broadband, 3G, has contributed to the rapid growth of the online consumer base. India's Internet user base is expected to reach 550 million, by 2020, with a penetration of nearly 40%, from the current estimated base of 243 million and penetration of 19%," said Technopak in a recent report.

E-tail started in India in the late 1990s but most of them could not survive the dotcom boom and bust of 2000. The second wave of e-tailing emerged in 2007.

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