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Proposed Amendments to the E-commerce Rules Not in the Best Interest of Consumers

Business Wire India The recently proposed amendments to the e-commerce rules, 2020, can have an adverse impact on the interests of Indian consumers if implemented without revision. This is according to an assessment conducted by the New Indian Consumer Initiative (NICI), a community-owned platform that fosters interaction on the many challenges and opportunities of consumers in the New Economy.

“NICI is concerned with some of the clauses in the proposed amendments and would, therefore, request the Department of Consumer Affairs to review the effectiveness of such clauses in achieving the intended objectives of improving consumer trust in the online ecosystem,” said Abhishek Kumar, Convenor of NICI. “Consumer interest is not only defined at the consumer end alone, it needs to include all elements that ensure that consumers get choice, quality, and affordable price. Draft amendments do not fulfil an adequate consumer welfare criterion and cannot be called as consumer-friendly.”

As per NICI’s assessment, the proposed amendments will result in increased compliance costs on small businesses which, in turn, will either result in the burden being passed on to consumers in the form of higher prices or the inability of such businesses to engage in e-commerce activities, thus restricting consumer choice. Moreover, constraints on curating searches will take away the convenience currently enjoyed by consumers, forcing them to spend hours on finding relevant products. Additionally, since platforms will not be able to list products based on the ratings of sellers, consumers will be apprehensive about the quality of products they are purchasing.

One of the most significant limitations being proposed is on the consumers’ ability to purchase products at discounted prices. Such an amendment directly targets ‘flash sales’ that several e-commerce platforms are able to offer their customers. The ability of consumers to pay a premium for faster delivery of products will also be taken away if the proposed amendments are adopted.

To gauge perceptions of consumers on the ground in response to the proposed amendments, NICI conducted an online survey for which it received responses from about 3,500 respondents, representing almost all states in India, making it a pan-India survey.

The survey results of 3476 respondents reflect a consumer sentiment aligned with NICI’s assessment:
 

85%* respondents do not want flash sales to be banned.
90% respondents prefer shopping online during lockdowns due to the pandemic.
85% respondents did not want express deliveries for their orders (Note: Normally a small percentage of consumers prefer express deliveries. In that regard, the new rules are prohibitive.)
70% respondents want local sellers to sell online.

[*Percentages are close approximations]

Simultaneously, NICI has also received many e-mails from consumers expressing concerns over the proposed amendments. The outcome of NICI’s assessment and outreach clearly indicates a larger consumer sentiment in the country that wants the proposed amendments to be reconsidered, otherwise, they may have an adverse impact on consumer welfare.

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