Reactions over government's nod to 100% FDI in marketplace model of ecommerce retailing

Author(s): 

Reacting over the government's nod to 100% foreign direct investment (FDI) in the marketplace model of e-commerce retailing with a view to attract more foreign investments, Mr.Urvesh Goel, Founder, SyberPlace.com, said: "Marketplaces are technology platforms, and were always open to 100% FDI. There is an inconsistency in how the law on multi-brand retail is being implemented. Companies which have more than 25% of their business between them are 'group companies', under law. Such marketplaces which have access to 100% FDI cannot be allowed to engage in multi-brand retail through such 'group companies'. One of the largest FDI funded marketplaces does more than 80% business with one multi-brand company. Another such marketplace has invested in a multi-brand venture. It is difficult to believe that they will be biased to a seller in whom they are invested. The former marketplace has differential business policies supporting the business of this seller which contributes to their 80% business."
Expressing his views, Abhinav Choudhary, Co-founder, Smartprix.com, said "New DIPP guidelines clarifies Government stance on FDI and ecommerce markets, addressing several key issues like price regulation and service liability. This lucidity will assure and motivate big retail giants to invest in India, and that shall consequently help more local sellers extend their reach online, thus leading to overall growth of the ecommerce sector. Resulting competition will be good for start-ups like Smartprix who aim to simplify online shopping space and for end consumers as well."

Date: 
Thursday, March 31, 2016