comscore 25 pc cap on vendors on e-commerce marketplaces is reasonable: Government official
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25 pc cap on vendors on e-commerce marketplaces is reasonable: Government official

The government has made it clear that there will be no relaxation on the 25 percent cap for a single seller on an e-commerce site.

  • Published: April 1, 2016 12:12 PM IST
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Ruling out any relaxation in the 25 percent cap on sales from a single seller for e-commerce market places, a top government official today said the limit is reasonable and fair. Permitting 100 percent FDI in marketplace model of e-commerce, the Department of Industrial Policy and Promotion (DIPP) has put a condition that an e-commerce entity will not be permitted more than 25 percent of the sales through its marketplace from one vendor or their group companies. Also Read - Facebook will now make money from WhatsApp's in-app purchases

Also Read - Flipkart to acquire Rs 1,500 crore worth stake in Aditya Birla Group's Fashion retail

Some e-commerce players, industry experts as well as IT industry body Nasscom have said that restricting sales of a vendor to only 25 percent of the sales in the marketplace may prove to be restrictive, more so if the vendor sells high-value items. When asked, DIPP Secretary Ramesh Abhishek said, “25 percent is a fair number because we want it to be a marketplace model and not inventory.” Also Read - Flipkart shares customer behavior insights post coronavirus lockdown; here is everything we know

He said that if a firm is providing a marketplace model platform, sourcing 25 percent from one vendor is reasonable and large number of sellers can sell through that platform. Nasscom has said that due to this cap the industry might face difficulties in case of sale of electronic items, where a vendor maybe offering exclusive access to certain items or discounts.

RELATED: Indian government allows 100% FDI in e-commerce marketplace model, but with some caveats

Talking about the rider that e-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods and services, he said that such players are not allowed to announce discounts.

ALSO READ: 100 pc FDI in e-commerce could spell the end of discounts offered on Flipkart, Snapdeal, and Amazon India

Announcing discounts by marketplace model players will infringe the law, he said. “Discounts can only be given by the owner of the goods or provider of services,” another official said. Some industry experts have said that the guidelines on pricing may impact big e-retailers.

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  • Published Date: April 1, 2016 12:12 PM IST



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