Karnataka tops the country in online deals

If you are someone who shops online for gadgets, clothes, groceries, food and every other thing, or go to direct sellers (and have felt cheated some time), or if you run an enterprise that caters to such shoppers, look out for some smooth and fair times.

Karnataka, which tops the country in Internet-based or e-commerce deals, could be the crucible of a path-breaking policy on the relatively new, unconventional ‘non-store retail’ mode that is increasingly touching people’s lives.

The apex industry body, Federation of Indian Chambers of Commerce and Industry (FICCI), is in talks with two State departments to streamline non-store transactions, according to Avinash Vashistha, chairman of the Karnataka State Council of the FICCI.

The policy is expected to include consumer rights, privacy and safety of data, quality of product and services, refunds and transparent price offers for the buyer, and reasonable guidelines, fewer taxes or other hassles for the sellers. It will also tackle fly-by-night operators.

Benchmark for others

While FICCI is discussing the matter with the Centre, this initiative is seen as a benchmark for other States.

The non-store retail segment, although still under 5 per cent of the overall retail sales, is the fast-growing portion, which is increasing by 25 per cent each year. “If you take the Internet-based transactions, the online sales revenue was $ 1.1 billion in 2011. Today, a single e-commerce company like [Bangalore-based] Flipkart has reached that size; others such as Myntra [also from Bangalore] and Snapdeal are also catching up,” Mr. Vashistha told The Hindu. Direct sales touched Rs. 7,164 crore in 2012-13.

“Looking at the high growth, FICCI thinks it is time for governments to put right policies in place,” said Mr. Vashistha, who is the chairman and managing director of technology and management consulting firm Accenture India.

FICCI has had discussions with the Department of Industries and Commerce, which is under the Chief Minister, and the Department of Food and Civil Supplies, which handles consumer affairs. The Minister for the latter department, Dinesh Gundu Rao, is said to see the need for such a policy.

“This sector has been facing problems throughout India. We plan to work out a policy to ease some of these issues,” said P. Radhakrishnan, director and head of FICCI’s Karnataka State Council.

Non-store retail, for example, does not fall under the Companies Act or Shops and Commercial Establishments Act. Yet, these enterprises were hassled by unrelated laws ranging from taxes, labour laws, and money laundering, he said.

FICCI is consulting the National Law School of India University about reviewing labour laws, tax norms and the Prize Chits and Money Circulation Schemes (Banning) Act and other Acts.

Set to burgeon

With global e-tailer major Amazon landing in the country and talking of 1.5 crore products to sell, the non-store retail segment will burgeon. The rules of the game need to be defined, said Anand Sudarshan, co-chairman of the FICCI’s Karnataka State Council.

For example, how will the common commercial rule of the Shops and Commercial Establishments Act apply to direct and online sellers? There are issues of data privacy, safety, consumer rights and geography.

The issues were discussed at a gathering of direct sellers and e-tailers on Wednesday, and will go into a policy paper that will be recommended to the State government.

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