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Indian e-commerce sector comes under pressure

E-commerce players in India face the risk of increasingly coming under pressure in 2020 due to key policy changes and the entry of JioMart,s says Fitch Solutions. While an e-commerce policy is still in the works, it is likely to take effect from March. The earlier draft guidelines ban global online retailers from selling products from companies or affiliates in which they own an equity interest. Now a regulatory authority may be set up to resolve disputes between large online retailers and small enterprises in the country.

Under the new policy, international e-commerce companies in India would be banned from influencing pricing, employing unfair promotional activities, as well as misrepresenting the quality or features of their product offering. E-commerce players will also be compelled to store generated data on servers in India. This would put an additional burden on international players, which will be urged to establish local centers for the collection and storage of their data. The days of deep price promotions on online platforms are likely to be numbered in India.

Reliance Retail plans to enter the digital market space with its new e-commerce platform JioMart. A significant acceleration of online purchases of food and drink products is expected in 2020.

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