Amazon Current Affairs - 2019

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New norms for FDI in e-commerce

The new norms for the foreign direct investment (FDI) in e-commerce, bars e-commerce firms from selling products of entities in which they have an equity stake.

Why the new norms?

The new norms are brought in by the government to plug-in some loopholes like:

  • To bypass the rules which restricted large sellers on platforms such as Flipkart and Amazon from contributing more than a quarter of sales, online retailers had set up structures to get around those loopholes by mandating other sellers to buy from those large sellers and then, in turn, sell those products on e-marketplaces.
  • Large sellers formed multiple entities, which sold their products separately on online marketplaces.
  • The small traders were complaining that deep discounts offered by the likes of Amazon and Flipkart are driving them out of business.
  • The new norms aim to tackle the anti-competitive behaviour by e-commerce entities and to ensure that there is no wrong subsidization and the marketplace remains neutral to all vendors.

How will it affect e-commerce companies?

The impacts of the new norms are:

  • The e-commerce companies like Amazon and Flipkart would be adversely affected because Amazon has several such joint ventures, including Cloudtail and Appario. Even Flipkart has exclusive partnerships with top smartphone brands such as Xiaomi and Oppo. The new norms will adversely impact their business models.
  • The critics blame that the new norms are not in sync with the spirit of competition and free market economy because Only those exclusive arrangements that have an appreciable adverse effect on competition are prohibited under the Competition Act.

The new norms are welcomed by stating that the new norms will enable a level- playing field for all sellers especially MSMEs and help them leverage the reach of e-commerce.

Government launches E-Tribes India on e-commerce platforms

The Tribal Cooperative Marketing Development Federation of India, (TRIFED), under Ministry of Tribal Affairs has launched E-Tribes India banners on e-commerce platforms like Amazon, Snapdeal, Paytm & GeM.

It also launched TRIFED’s websites-www.tribesindia.com, www.trifed.in and Retail Inventory Software and M-commerce app as part of Digital India Initiative. TRIFED’s Handbook for Retail Trade and TRIFED’s quarterly magazine ‘Tribes Haat’ was also launched.

Key Facts

TRIFED has developed its own e-commerce (electronic commerce) website i.e., tribesindia.com for sale of all its products and app to tap m-commerce (mobile commerce) too. The purpose of going digital will help in expansion of tribal commerce and availability of tribal products over large area. It will result in reaping greater benefits for tribal artisans.

For this purpose, TRIFED has entered into agreements with e-commerce platforms like Amazon and Snapdeal who will offer their customers various tribal products and produce through their portals to facilitate online sale. Also, Tribes India products are available on Flipkart and Paytm too. On the request of Ministry of Tribal Affairs, Ministry of Commerce has also made provision for sale of tribal products through TRIFED on Government e-Marketplace (GeM).

Tribal Cooperative Marketing Development Federation of India Limited (TRIFED)

TRIFED is multi-State Cooperative Society under Ministry of Tribal Affairs. It was established in August 1987 by then Ministry of Welfare under Multi State Cooperative Societies Act 1984 (which has now been replaced by Multi-State Cooperative Societies Act, 2002). It is headquartered in New Delhi.

It aims at promoting and marketing tribal products, tribal art and crafts within t country and abroad by providing marketing support to tribal products through its network of retail outlets. It also organizes exhibitions like National Tribal Craft Expo called “Aadi Mahotsav” etc. to promote and market tribal products. It also facilitates participation of tribal artisans to enable them to interact directly with art lovers to assess market needs.