Apparel Online India Magazine March 1st Issue 2019 | Page 50

N E W E - C O M M E R C E P O L I C Y: P L AY E R S M U L L I N G
M E A N S T O O V E R R I D E T H E FA L L O U T
NEW E-COMMERCE POLICY: ADVANTAGE PHYSICAL
STORES?
Formulated and cited to usher in price parity between online and
offline retailers, the policy also intends to address the major issue
of data colonization. Major policy highlights include:
• Online marketplaces must treat all vendors at par; the policy
prohibits e-retailers from selling products via vendors in which
they have an equity interest
• The concept of ‘exclusivity’ shall no longer prevail.
• No e-retailer can control the inventory of the vendors.
• E-commerce players cannot influence the sale price of goods or
services, directly or indirectly.
This move in some way aims to promote fair trade. While online
giants will now need to urgently re-strategize their business,
physical stores will benefit from this move. For instance, in absence
of ‘exclusivity’, vendors will scout for alternate options such as
physical stores to reach out to a wider network, including in the
country’s hinterlands. 
By opting for the offline route, they will now give a hitherto lacking
‘look and feel’ effect of their product to consumers. This will
invariably create more demand for retail real estate and boost
bricks-and-mortar retail formats, which in some way are trying to
adjust to level up with the new online revolution. 
The market share of online players is more than 12% of the overall
retail market. This is expected to reach at par with physical stores
over the next 5 years.
Anuj Kejriwal
CEO & MD, ANAROCK Retail
T
he advent of e-commerce in India ‘smartly’ altered the shopping
habits of Indian netizens. Anything and everything – from
groceries to apparel to electronics, etc. – is now just a click away.
For a while, it appeared that ‘couch potato shopping’ was gaining
prominence and disrupting the entire bricks-and-mortar business. 
However, it now emerges that this has not really happened. Despite
causing disruptions, the e-commerce impact was not enough to
have a significant and lasting impact on the conventional retail
formats.
For a while, online giants like Amazon and Walmart-owned
Flipkart were basking in the rising success of the effervescent
Indian e-commerce business. They were manoeuvring strategies
to penetrate deeper into newer markets by way of discounts for
their customers. And then, the Government pulled out a wild card
– and thereby threw a major spanner in the works – with the new
e-commerce policy. 
It came as a shock for the affected entities, including consumers,
who were buried deep in the world of cash-backs and deep
discounts. However, thanks to the new policy, traditional retailers
now had a more level playing field and could regain a significant
share of their bricks-and-mortar stores.
50 Apparel Online India | MARCH 1-15, 2019 | www.apparelresources.com
WHAT NEXT FOR E-RETAILERS?
Even before the announcement of the policy, e-commerce biggies
including Amazon and Alibaba were striving to capture a larger
pie of the physical stores in order to stay relevant in the ongoing
retail boom in India. This policy change will now make them more
‘serious’ about investing in offline stores. 
E-commerce players will also look to create new tie-ups with
offline retailers or buy a stake in them. Today, its most-anticipated
deal with Kishore Biyani-led Future Retail may see some positive
signs. Whether or not this deal happens, it will eventually intensify
competition in the market – and this will invariably benefit the
consumer. Last but not the least, vendors (smaller brands) who
couldn’t afford or opt for ‘exclusivity’ and were eventually losing
their visibility, will now have less to fear as they will slowly
and steadily regain and retain relevance in the overall retail
market place.
That said, there are certain loopholes in the policy, which could
be used by online players to ‘save their day’. Even if we do away
with the ‘exclusivity’ in online retail, players may still continue to
give offers and discounts. New Indian brands entering the market
can still tie up with online players to market their products who, in
turn, can limit their supply to physical stores. The norms on this
are still not clear in the new policy.
After all, it boils down to survival tactics that may eventually save
the day for online players. With billions of dollars at stake, they
will surely work to find alternatives so as to remain relevant in the
Indian retail growth story.