Indian government may not allow e-commerce platforms to host flash sales anymore

As offline retailers in India continue to remain dissatisfied with practices that are predatory in nature by e-commerce giants like Amazon and Walmart-owned Flipkart, the Indian government is set to revise the e-commerce regulations.

E-commerce sites might no longer be permitted to host flash sales according to the new draft regulations by the Ministry of Consumer Affairs, Food and Public Distribution.

The Department of Consumer Affairs has defined the term ‘flash sales’ in the amended policy as “sale organized by an e-commerce entity at significantly reduced prices, high discounts or any other such promotions or attractive offers for a predetermined period of time on selective goods and services or otherwise with an intent to draw large number of consumers.”

Previously, the Confederation of All India Traders (CAIT) had accused Amazon, Flipkart and other foreign funded e-commerce entities of following unethical business practices like predatory pricing, deep discounting, loss funding, controlling inventory as well as adoption of preferential sellers.

The Ministry stated, “To ensure compliance of the Consumer Protection Act, 2019 and Rules, the appointment of Chief Compliance Officer, a nodal contact person for 24×7 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.” It added that this would ensure effective compliance with the provisions of Act and Rules as well as strengthen the grievance redressal mechanism on e-commerce platforms.

The Ministry would forbid e-commerce entities from listing associated parties as sellers for selling to customers directly. It will also require e-commerce sites to provide the best before or use before date to let consumers make a purchase decision which is informed enough.

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