siliconindia | | September 20198TIMPLICATIONS & EFFECTS: HOW THE NEW FDI RULES WILL IMPACT E-COMMERCE IN INDIABy Rishabh Mehra, MD & CEO, Digital Mall of AsiaRishabh overseas the overall operations at Digital Mall of Asia, where he utilizes his deep domain expertise to craft successful business models & strategies.he recent changes in the FDI policy have ushered in a major change in how e-commerce operates in India. The move is expected to have a major im-pact on online sales; as per estimates, it could lead to an erosion of sales worth Rs.35,000-40,000 crore in the online retail space, So why are offline retailers across India celebrating the announcement? Largely because the latest policy change has created a level playing field by prohibiting e-Commerce giants such as Amazon and Flipkart to offer deep discounts through their partnered/preferred retailers. This opens up a potential business opportunity worth Rs.10,000-12,000 crore for physical retailers in the online space by FY20. But that is not the only impact that this policy change will usher in the Indian e-Commerce space.Impact on e-Commerce playersFrom now on, no online entity will be allowed to offer products in which they hold a direct or indirect equity interest. Sellers can't even make bulk purchases when it comes to buying wholesale. Also, e-Commerce firms are now prohibited to push merchants to sell products exclusively on their platform. The move will thus uplift local retailers who were facing losses in the wake of deep discounts offered by online players, enabling them to compete on a more equal footing with online retailers backed by corporate giants. Moreover, companies with equity stakes on the e-Commerce marketplace are now liable to treat all of their sellers in a fair manner in terms of providing support for services such as logistics, fulfilment, and payments on the platform. in my opinionRishabh Mehra, MD & CEO
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