E-Commerce Marketplace Are Only Allowed To Sell Third-Party Products On Their Platforms

The parliamentary standing committee advised that there needs to be a clear definition of the two models, inventory-led and marketplace

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New e-commerce policy, reportedly, focuses to bring a proper distinction between marketplace model and inventory-based model. It is said to ensure that e-commerce marketplaces are only allowed to sell third-party products on their platforms.

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According to a Business Standard report, DPIIT has informed the parliamentary standing committee on commerce that the conflict arises due to the e-marketplace entities control of vendors inventory would be addressed in the proposed policy. It is also advised that there needs to be a clear definition of the two models, inventory-led and marketplace. This is to address the competition-related issues including deep discounting, lack of platform neutrality, misuse of data and non-transparent search ranking.

As per reports, the standing committee said in the Rajya Sabha, "The e-commerce entity should be the only seller on such an e-commerce store platform and there should not be any third-party seller. If an e-commerce company wants to run both the models, they should use distinct branding for each of the platforms."

"E-commerce firms should ensure that none of their related parties and associated enterprises are listed as sellers on their shopping websites, and no related entity should sell goods to an online seller operating on the same platform," stated in the draft of e-commerce rules released last year.

According to market studies, India's e-commerce market is projected to surpass $400 billion market size by 2030 with a CAGR of 19 per cent.