Rule blow to e-retail bargain hunters

Products go off online platforms

  • Published 2.02.19, 7:04 PM
  • Updated 2.02.19, 7:04 PM
  • 2 mins read
  •  
The new regulations prohibit online retailers from selling products of the companies in which they have a stake, as also their own brands (Shutterstock)

Subhajyoti Biswas does not remember the last time before Friday that he did not find the product he had been looking for “at the best price” on Amazon. “Currently unavailable,” said the message below the product

description for each item in the AmazonBasics collection.

For most young shoppers like 31-year-old Subhajyoti who are used to bargain hunting online for everything from pyjamas to potato wafers, it was an e-retail Black Friday like they have never known as new foreign direct investment (FDI) regulations took effect, forcing Amazon and competitor Flipkart to pull down a humongous inventory of products from their virtual shelves.

“I was looking for a iPhone charging cable that used to be available as an AmazonBasics spin-off for around Rs 700. I was forced to buy a cable from a City Centre store that cost me nearly Rs 1800,” Subhajyoti, a stockbroker, said.

In the morning, Amazon had taken down even its own range of Echo speakers. These were back in the online marketplace by evening via other sellers on the platform.

The new regulations prohibit online retailers from selling products of the companies in which they have a stake, as also their own brands. Both Amazon and Flipkart, which became a Walmart subsidiary last year, have been hit the hardest.

The FDI rules also stop online retailers from making deals with manufacturers of various products to sell these exclusively on their platforms. Discounts and cashback promotions for these products are also gone.

Amazon alone pulled out nearly 4,00,000 products, including its Presto-branded cleaning goods, AmazonBasics items like cables, chargers and batteries and clothing from Shoppers Stop, in which the Jeff Bezos-founded company has a 5 per cent stake. “Currently unavailable. We don’t know when or if this item will be back in stock,” said the message that popped up each time one clicked on a garment sold by Shoppers Stop.

Sanjana Agarwal, a 28-year-old software engineer, said she would even make her grocery and other household purchases online. On Friday, she couldn’t buy a Presto glass cleaner she had been looking for on Amazon.

“The government should not decide how people buy things and who they purchase from,” she said.

A search for an “Amazon Exclusive” phone on the e-commerce website drew a blank. A search for headphones under the same category did not yield any result either. Flipkart also had no “exclusive” product on sale.

Flipkart was forced to take down nearly a fourth of the products that it sells online, sources said.

Regular online shopper Partha Sarathi Chakraborty, 31, fears that the new regulations for foreign e-commerce players would make buying on platforms more expensive.

“Now that sales by affiliated companies of the e-commerce websites are prohibited, several products have disappeared and others will get pricey as those will only be sold by small traders, who possibly cannot negotiate low wholesale prices with manufacturers,” the Accenture employee said. “Both Amazon and Flipkart will lose their edge if this continues. They will transform into sites listing products for a fee where quality cannot be assured.”

Garima Singh, a 35-year-old interior designer, said all she wanted was hassle-free shopping online and discounts. “The rules clearly aim to protect the smaller traders but don’t take into account the fact that consumers like us will have to shell out more. Discounts will shrink, if they haven’t already.”

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