Overregulation may hurt ecommerce in India
Stringent measures may be detrimental to the consumer sentiments who have adopted ecommerce as a part of their changing shopping experiences, especially during the pandemic period
image for illustrative purpose
New Delhi: Engaging in a latest discussion on the newly drafted Consumer Protection (e-commerce) Rules, 2020, experts have observed that booming industry of ecommerce might be hampered -- the business operations and consumer sentiments in case of any overregulation.
Government officials, consumer activists and other industry experts spoke at an online webinar on Thursday to debate over the interpretation of the draft of the newly launched ecommerce rule. Public policy think tank group, The Dialogue, hosted the session to ponder over the new regulations over ecommerce space which criticised the view point of "keeping online and offline marketplace on the same pedestal."
"There has to be harmony among various acts, otherwise the smaller e-commerce players will be overburdened with compliances. Physical shops and e-commerce will always co-exist, as certain consumers will always prefer to see the product in person before they buy it.
But the preference will be more for e-commerce as consumers find the online shopping experience more convenient. Many will be physical retailer and on e-platform as well. It saves time and also increases their choice," said Aruna Sharma, Former Secretary, Government of India.
The Centre has proposed additions and changes to the Consumer Protection (E-commerce) Rules, 2020. A draft of the proposed rule has been put out by the Department of Consumer Affairs and is open for public comments regarding the same.
The revised Indian Consumer Protection (E-commerce Rules, 2020) was launched on June 21 by the Centre, which includes several new proposals regarding ecommerce including banning flash sales. The moves aim at eliminating business advantage to select ecommerce dealers who hold a larger presence on the online marketspace.
Consumer Activist, Jehangir Gai overserved that regulation is required to monitor the exponentially growing ecommerce market in the country, however, he maintained that stringent measures may be detrimental to the consumer sentiments who have adopted ecommerce as a part of their changing shopping experiences, especially during the pandemic period.
"While a certain amount of regulation is required, the proposed rules will not only limit consumer options with respect to sales and discounts but also hamper the ultimate online shopping experience. Both online and offline markets should be able to always coexist.
Though the objective of the rules is laudable, there is a need to check the methodology. So, let's have a meaningful regulation that safeguards the consumers without impacting the industry," said Gai.
The experts also agreed to the point that amendments such as mandatory appointment of a grievance officer, a chief compliance officer, and a nodal contact person "for 24×7 coordination with law enforcement agencies" for all e-commerce companies, will increase the compliance burden, especially for small businesses.
