Amazon has started removing a wide array of products from its website in India after the country's new e-commerce policy kicks in from today. A lot of exclusive products and brands have disappeared from the marketplace since the company has no option, but to comply with the new norms.
In December, the Indian Government modified foreign direct investment (FDI) rules for the e-commerce sector, and this has highly disrupted the sales model of Amazon and Flipkart.
To start with, marketplaces can no longer sell products exclusively on their platform. So, every brand that was earlier closely associated with the company, has been removed from the platform.
The new investment rules bar online retailers from selling products via vendors in which they have an equity interest. Numerous products from sellers like Cloudtail are no longer available on the website since Amazon has an equity stake in the seller. Even products from Shopper's Stop have been removed because Amazon owns five per cent stake in the retail label.
Amazon and Walmart-owned Flipkart have tried to lobby against the new rules, but to no avail. In fact, Amazon's own line of Echo speakers has been taken off the shelf. Amazon had written to the Indian Government asking for a four-month extension to comply with the new rules, a company spokesperson said. But, there has no update on the proposal's consideration from the authorities.
Amazon has warned of widespread disruption due to the new policy and according to Reuters, the policy could "have undesirable impacts on the continued growth of e-commerce in India."
Flipkart said that it was "disappointed that the government has decided to implement the regulation changes at such haste," but said it was committed to complying with the new rules.
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The new policy comes amid intense lobbying by India's small and medium scale enterprises who have been most hit due to the marketplaces. They accuse the platforms of stockpiling goods at wholesale rates and then offering deep discounts to grow sales. The Confederation of All India Traders, which says it represents more than 70 million local retailers, warned the government against granting an extension on the enforcement of the new policy.
Direct changes on Flipkart's website remain unclear right now, but we're sure a lot of exclusive apparel labels are going to disappear soon.
The policy has received a mixed response since smaller traders are happy with the speed bump. Nationalists believe foreign marketplaces were playing around FDI rules to get a foothold, and in return damaging the country's existing merchants.
Update: Amazon has reached out to confirm that Echo speakers and a few other products are now back on the website, and available for purchase.