scorecardresearch

Amazon, Flipkart may no longer host flash sales of smartphones and other goods

The government may not permit e-commerce sites to hold flash sales of goods and services if the new law comes into effect.

Story highlights
  • The government of India is planning to introduce stricter norms for e-commerce platforms like Flipkart, Amazon.
  • The government may not permit e-commerce sites to hold flash sales of goods and services.
  • The ministry has also alleged that the e-commerce platforms manipulate search result to promote certain sellers

The government of India is planning to introduce stricter norms for e-commerce platforms like Flipkart, Amazon. The government may not permit e-commerce sites to hold flash sales of goods and services. The Department of Consumer Affairs has sought comments/suggestions on the proposed amendments to Consumer Protection by July 6. Walmart-owned Flipkart, Amazon hold countless sales thorough out the year which seems to be hampering the small businesses, under the new law such sales would be prohibited

The government has said in its release that it has received countless complaints from consumers, traders and associations against widespread cheating and unfair trade practices being observed in the e-commerce ecosystem. As a result of which, the Ministry of Consumer Affairs in its proposal has said that no e-commerce platform should be allowed to hold flash sales in India. Amazon, Flipkart hold flash sales especially around festivals like Diwali, Republic Day in India. While these sales must be highly beneficial for the e-commerce firms and the customers, the government may not let the sales anymore.

"Certain e-commerce entities are engaging in limiting consumer choice by indulging in 'back to back' or 'flash' sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a 'flash or back to back' order with another seller controlled by the platform. This prevents a level playing field and ultimately limits customer choice and increases prices," the ministry said in a statement.

The ministry has also alleged that the e-commerce platforms manipulate search result to promote certain sellers and offer preferential treatment to some sellers. However, the government is not giants in the conventional lash sales by third-party sellers on the e-commerce platform. The government aims to bring transparency in the e-commerce platforms curb what they call "unfair practices".

Just like the government had ordered Facebook, WhatsApp and Twitter to appoint nodal and compliance officers, it is also proposing that e-commerce firms appoint a chief compliance officer and a nodal officer as well as resident grievance officers in India.

"To ensure compliance of the Consumer Protection Act, 2019 and Rules, the appointment of Chief Compliance Officer, a nodal contact person for 24x7 coordination with law enforcement agencies, officers to ensure compliance to their orders and Resident Grievance Officer for redressing of the grievances of the consumers on the e-commerce platform, has been proposed. This would ensure effective compliance with the provisions of the Act and Rules and also strengthen the grievance redressal mechanism on e-commerce entities," the ministry said.

The ministry would also prohibit e-commerce platforms from listing associated parties as sellers for selling to customers directly. Along with that, e-commerce platforms will also be required to provide the best before or use before date to let consumers make an informed purchase decision. This way, they would be aware of the expiry date of the product they are purchasing. Flipkart and Amazon are yet to issue a statement on the same.