Experts not too awed by new e-commerce rules

Earlier this week, the Consumer Affairs Ministry issued the new draft e-commerce rules. Among other things, the proposed rules attempt to curb broad discounts, restrict the expansion of private labels, strategies companies often bank on to get more users, according to industry outsiders. Hence, they are not too impressed with the rules as they feel that these are likely to increase the compliance requirements of e-commerce companies and have the potential to dim the business growth of the firms.

Nikhil Narendran, partner at Trilegal, pointed out for example, that the term flash sale has been very loosely worded in the draft regulations and it appears that the definition implies a check on events that typically run for a certain duration like grand Diwali sales or something akin to heavy discount events like a Black Friday or Cyber Monday sale that is prevalent in the West. He opined that this is anti-consumer in nature. “What do you mean by large number of consumers, predetermined period of time? (as per the definition of flash sale in the rules) I could have a sale running throughout the year. There is no guidance provided in this to interpret. That is where I feel that businesses do not know how to create (discount) strategies while it gives unreasonable discretion to regulators,” added Gowree Gokhale, partner at Nishth Desai Associates.

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