Subscribe AMAZING MARKETER Channel and hit the BELL icon to watch latest videos Hello Amazers… I hope you all are aware of the fact that Indian ecommerce industry is going to change both dramatically and drastically from 1st February, 2019. The reason behind is the Modi’s government new policy for ecommerce industry. The policy is designed by considering all the ecommerce marketplace which have foreign investment. Amazon & Flipkart are the biggest name in it. So, this policy is designed in such a way that many are going to get help and many are going to get affected adversely. The prime motto of this policy is to exterminate “PREDATORY PRICING” and “DEEP DISCOUNTS”. In the past few years, Brick-&-Mortar seller, Traditional sellers, Local shopkeepers have suffered a lot due to these promotional practices. Even thousands of business have been closed as they were not able to sustain due to deep discounting and predatory pricing. So, as per the new rule of the policy no ecommerce website or marketplace can sell their own products on their website and any entity related directly or indirectly won’t be able to sell the products as well. And, above all, how much one individual vendor can sell on a particular website or ecommerce marketplace is defined now. No preferential treatment will be provided to any brand, supplier and product from now onward. Under this policy, cashbacks, brand launches, exclusive deals, preferential services or programmes such as Amazon Prime and Flipkart Plus could run into difficulties. The policy is designed to create an impartial marketplace and provide equal opportunity to sell and promote a product. But is it really true? Will market become unbiased for everyone? Will everyone get equal opportunity? Who are going to get benefited and who will bear the damages? So, who will become winner and who will loser by the implementation of this policy? In this video, we will discuss who will the winners that earn profits and who will the loser who bear losses? Myself Sorabh, you are watching AMAZING MARKETER. Let’s Learn Something AMAZING Today!! Let’s discuss the Loser first! Loser #1 – The HOT SHOTS With implementation of this policy, the most impacted entities or I would say most negatively impacted entities are Amazon & Flipkart. Because both these marketplaces have lure the customers by means of deep discounting. Customer do lot of shopping on these websites due to these attractive offers and low price which won’t be possible any further after this policy. So, after reading and analysing this policy, it looks like someone has analysed the working mechanism and business model these websites. And, create a masterplan to kill them systematically But why? I think it has been done to promote home grown player and provide them a better & equal opportunity. As far as I know, the only big home grown player or would be home grown player is “RELIANCE”. Because Reliance is coming up with its own ecommerce website and might be get supported by the government. I really want you to know whether I am thinking correct or not. Do share your opinion in comments. Loser #2 – Related Parties There is a rule in the policy that any company which has invested in that ecommerce platform or have any relation directly or indirectly will not be allowed to sell its products on that platform. Even if the company has control over the inventory of the marketplace than also it won’t be allowed to sell on it. In simple words, Cloudtail on amazon, whenever you search for a product or most of the seller has to compete with cloudtail. Actually cloudtail is a joint venture of Amazon and Narayana Muthry’s Catamaran which sell its products on amazon. Being an amazon company, it always gets preferential treatment and seller like us face lot of competition from it which will be reduced in future. So this is a good news for sellers as they don’t have compete with related parties of the ecommerce marketplace. Loser #3 – Associate Brands Another addition to this policy is inventory based provisions. Inventory of a vendor will be deemed to be controlled by ecommerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity. Thus, as per the rule no brand can do exclusive deal with any website. Recent example is One Plus 6T, it is an exclusive brand launch deal on 1st November 2018 with Amazon. So these kind of deals will not be feasible from now onwards. This will prevent any brand or supplier aligning exclusively with one marketplace, as is usually the case with many mobile or white goods brands. Loser #4 and these are biggest them of all. Online Shoppers Now let’s talk about buyers, online shoppers i.e. “WE”. We will not get any deep discount no fast delivery and cashbacks. Yes… all those products which we purchase on heavy discounts or cheap price will not available after this policy. Because, these are unfair and unethical practices under the norms of this policy. So, ultimately as a customer we are the biggest loser. As common people, we are the loser too. So, this is the greatest negative impact on us as we use to buy products with heavy discounts on these website is no longer possible. Looser #5 Few Small Seller Like I said, no vendor can sell more than 25% of its inventory on any marketplace. So, this will impact small entrepreneur, small business, especially those who do business from home or home business. Because you have to increase your production capacity. Suppose you sell 10 products earlier and out of those 4 products gets sold that mean you have sold more than 25% of your inventory on ecommerce marketplace. And, it will be considered as your inventory is managed by amazon or flipkart or whichever the platform is. This will become a dicey or problematic situation for you to increase your production capacity and remain within the limits of 25%. So, this going to be a huge challenge for small sellers especially those who do business from home. Loser #6 – Impact on investment and jobs This policy will definitely discourage the foreign investment in India. Amazon has already invested billions of dollars in India and recently Walmart acquired Flipkart in $16 billion. So these MNCs have already invested billions of dollars in India for warehousing, and jobs in logistics services. Due to implementation of this policy, definitely these companies will be impacted negatively and they will reduce the investment. Subsequently, jobs will get reduced dramatically. In India, negative impact will be there on foreign investment and jobs for sure. Till now, we have discussed who are loser due to implementation of the policy. Let’s discuss who will appear as a winner: Winner #1 – Brick-&-Mortar Seller In the past few year, if someone hit hard by online shopping website or ecommerce marketplace those are Brick-&-Mortar seller or traditional seller. The impact is so high that lakhs of seller have closed their business. Why they closed it? Heavy discounts & Cashback offers ease of buying without stepping out, and convenience of product return are the reasons of the closure and it almost kill their entire business. However, the new guidelines restricting discounts and cashbacks might help brick-and-mortar retailer retain customers. Winner #2 – Smaller ecommerce companies Companies like snapdeal, shopclues which don’t have huge corpus of money to compete with giants like Amazon & Flipkart are now have a chance to compete with them. They can now compete neck-to-neck with Amazon & flipkart. I believe they will encash this opportunity. Winner #3 – Small Seller Small seller like you and I, who are contesting the preferential treatment meted out by Amazon & Flipkart to their entities like Cloudtail of amazon & WSRetail of Flipkart, have reason to cheer. These companies are not allowed to do any selling on these platforms and every services like warehousing, logistics, etc. of any ecommerce website will be available to every seller. Also, all the seller would be equally eligible for third party promotions. So, everything will be impartial, unbiased, everyone gets equal opportunity. So I believe it’s good news of small sellers. We believe as a seller we will grow and this policy will help us. Let see what future holds for all of us. So these are the winners and loser once the policy gets implemented. I really want you to share your opinion about this policy in comments. Do LIKE & SHARE this video Become part of AMAZING MARKETER family or an AMAZER by subscribing this channel. Finally Keep Selling, Keep Smiling !!