The government’s move, tightening norms for online retailers such as Amazon and Flipkart, is seen as a strategy to give large and small local retailers and traders in the country a leg up, ahead of the general elections scheduled for 2019.
The norms, which are seen as helping protect domestic players, would not only help online marketplace players such as Snapdeal, and Paytm Mall but also large local companies such as Reliance that are eyeing a share of the e-commerce market in the country, according to industry watchers.
“There is a realisation in the government that after demonetisation and GST [Goods and Services Tax], they needed to give something to the traders,” said an industry expert who did not wish to be quoted.
Another expert said a lot of lobbying was being done by large local retailers against big e-commerce companies in the country. “Those are the ones which are going to gain from this,” said the expert also not wishing to be quoted.
Devangshu Dutta, CEO of retail consultancy Third Eyesight, said with the general elections coming up, the government could not have ignored the demands of domestic retailers. “This includes red flags highlighting that e-commerce players have grown on the back of aggressive discounting. It is the job of any democratically elected government anywhere in the world to look at domestic interests first,” he said.