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January 3, 2014 05:51 pm GMT
As India prepares to reconsider the ban on foreign investments in the country’s e-commerce sector, two of the world’s biggest e-commerce companies — Amazon and eBay — are anxiously hoping to conquer what they refer to as their last frontier. India’s Department of Industrial Policy and Promotion (DIPP) has put out a note inviting various stakeholders to share feedback on the existing regulations restricting foreign direct investment (FDI) in retail e-commerce. Sources at Amazon India and eBay’s operations in the country have told us that both the companies are aggressively preparing their pitches urging the policymakers to revoke the e-commerce ban. So far, both Amazon and eBay have had no choice but to operate as online marketplaces in India, limiting their ability to compete effectively with local rivals such as Flipkart.In the marketplace model, companies such as eBay do not own any inventory, or sell any of their own merchandise to Indian shoppers. They are only allowed to offer products from third-party sellers. In February 2013, Amazon’s global vice president, Paul Misener, had also met with an Indian trade minister,seeking amendments in the laws restricting e-commerce. This is what the Indian laws say on foreign investment in e-commerce: E-commerce activities refer to the activity of buying and selling by a company through the e-commerce platform. Such companies would engage only in Business to Business (B2B) e-commerce and not in retail trading, inter-alia implying that existing restrictions on FDI in domestic trading would be applicable to e-commerce as well. India’s nearly $3.1 billion e-commerce market (excluding online travel industry) is dwarfed in size by China’s nearly $200 billion market for online sales, but it’s expected to grow by over seven times to $22 billion in five years, according to a CLSA report published in November 2013. While existing regulations don’t allow foreign companies to run full e-commerce businesses in India, companies like eBay have become active investors in local startups that can. EBay beat Amazon and Walmart in April 2013 to lead a $50 million funding round in Snapdeal.Meanwhile,Amazon started its India sitein June 2013: it is based on marketplace model that does not engage in any kind of direct sales to comply with the local regulations. Up to now, the Indian government has kept companies like Amazon at bay as a kind of protectionist move, to encourage local business development. In September 2012, the Indian government allowed 100% foreign investment
Original Link: http://feedproxy.google.com/~r/Techcrunch/~3/xrZ4pznrA5I/
India May Relax E-Commerce Rules, Opening The Door Further For Amazon And Other Global Giants
As India prepares to reconsider the ban on foreign investments in the country’s e-commerce sector, two of the world’s biggest e-commerce companies — Amazon and eBay — are anxiously hoping to conquer what they refer to as their last frontier. India’s Department of Industrial Policy and Promotion (DIPP) has put out a note inviting various stakeholders to share feedback on the existing regulations restricting foreign direct investment (FDI) in retail e-commerce. Sources at Amazon India and eBay’s operations in the country have told us that both the companies are aggressively preparing their pitches urging the policymakers to revoke the e-commerce ban. So far, both Amazon and eBay have had no choice but to operate as online marketplaces in India, limiting their ability to compete effectively with local rivals such as Flipkart.In the marketplace model, companies such as eBay do not own any inventory, or sell any of their own merchandise to Indian shoppers. They are only allowed to offer products from third-party sellers. In February 2013, Amazon’s global vice president, Paul Misener, had also met with an Indian trade minister,seeking amendments in the laws restricting e-commerce. This is what the Indian laws say on foreign investment in e-commerce: E-commerce activities refer to the activity of buying and selling by a company through the e-commerce platform. Such companies would engage only in Business to Business (B2B) e-commerce and not in retail trading, inter-alia implying that existing restrictions on FDI in domestic trading would be applicable to e-commerce as well. India’s nearly $3.1 billion e-commerce market (excluding online travel industry) is dwarfed in size by China’s nearly $200 billion market for online sales, but it’s expected to grow by over seven times to $22 billion in five years, according to a CLSA report published in November 2013. While existing regulations don’t allow foreign companies to run full e-commerce businesses in India, companies like eBay have become active investors in local startups that can. EBay beat Amazon and Walmart in April 2013 to lead a $50 million funding round in Snapdeal.Meanwhile,Amazon started its India sitein June 2013: it is based on marketplace model that does not engage in any kind of direct sales to comply with the local regulations. Up to now, the Indian government has kept companies like Amazon at bay as a kind of protectionist move, to encourage local business development. In September 2012, the Indian government allowed 100% foreign investmentOriginal Link: http://feedproxy.google.com/~r/Techcrunch/~3/xrZ4pznrA5I/
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