India proposed on Monday banning flash sales on e-commerce platforms and preventing their affiliate entities from being listed as sellers as the South

India proposes tougher e-commerce rules to address ‘widespread cheating’ complaints

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2021-06-21 21:30:06

India proposed on Monday banning flash sales on e-commerce platforms and preventing their affiliate entities from being listed as sellers as the South Asian market looks to further tighten rules that could hurt the future prospects of Amazon and Walmart’s Flipkart in the world’s second-largest market.

The proposal (PDF), unveiled by India’s Ministry of Consumer Affairs on Monday evening, comes at a time when brick-and-mortar retailers in India have ramped up their complaints to raise concerns about what they allege as unfair practices employed by Amazon and Flipkart as they expand their operations in the country.

In its proposal, India’s Ministry of Consumer Affairs said that e-commerce firms should not be allowed to hold flash sales in India. These flash sales, akin to Black Friday and Cyber Monday sales in the U.S., are very popular during festive season in the country. During flash sales e-commerce firms have traditionally observed the biggest spikes in customer orders as brands offer heavy discounts on their products.

“Certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back’ order with another seller controlled by platform. This prevents a level playing field and ultimately limits customer choice and increases prices,” the ministry said in a statement.

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