Reliance Asks Govt To Make Strict Rules For Ecommerce Portals: Amazon, Flipkart Should Worry?

India needs special regulations to ensure “non-discriminatory” treatment of sellers on marketplace websites, informed by Reliance told officials.

Need Of Special Regulations

This is to ensure that tighter regulation of marketplace e-commerce platforms should treat all sellers equally, according to the sources.

In recent years, India’s biggest retailer, Reliance with more than 12,000 stores, expanded its e-commerce operations.

 But, the retailer still lags market leaders such as Amazon and Walmart’s Flipkart, which it counts as key rivals.

Reliance told officials that India needed special regulations to ensure “non-discriminatory” treatment of sellers on marketplace websites, At a closed-door government meeting on Tuesday.

Although it did not name any company, its remarks chime with calls for greater regulatory oversight in India of e-commerce giants Amazon and Flipkart, the sources said.

During this meeting, the online platform Amazon had taken note of concerns raised by the retail trading community, the sources added.

On this subject, Amazon and Flipkart have not released a statement yet.

Preferential Treatment For Big Sellers 

Earlier, in the past, India’s small retailers have alleged the US platforms for giving preferential treatment to selected big sellers in which they hold discreet financial or business interests.

On the other hand, the US companies deny this saying that they only run marketplaces connecting customers with independent sellers.

Tuesday’s meeting was called by India’s industry promotion department during which traditional retailers raised concerns and were supported by a senior Reliance executive.

The Reliance executive said that marketplace websites must act independently and should have no relationship with their sellers.

Further, indicating that officials should incorporate such provisions into policy changes for the booming sector.

Growing Rivalry Between Locals And e-Commerce Platforms

With this move, India’s richest man, billionaire Mukesh Ambani owned Reliance signals its growing rivalry with US e-commerce platforms in the race for supremacy in one of the world’s fastest-growing retail markets.

Here, Reliance is able to sell goods to consumers directly on its website or apps being a local player.

On the other hand, foreign platforms cannot do so in light of stricter regulations designed to protect the local retailer base.

One of the sources said, “It appeared Reliance is pushing the government hard (on regulations) so that they succeed in e-commerce,”.

Why Would This Happen?

Prior to this, Amazon favored select sellers in India and used them to bypass the foreign investment law of the nation last year.

According to the report, the US company also ran a systematic campaign of creating knockoff goods and rigging search results to boost its own product lines.

In its defense, Amazon claims that it does not give preferential treatment to any seller or manipulate searches and complies with all Indian laws.

In response, the Confederation of All India Traders said that it had urged officials to establish an e-commerce regulator to hear retailers’ grievances at Tuesday’s meeting.