Commerce minister Piyush Goyal is expected to meet top executives of Amazon, Flipkart, Meesho, Shiprocket and Swiggy among others, they added.
Goyal is also the minister of consumer affairs, food and public distribution. The department of consumer affairs recently sought data from online grocers and quick commerce companies to understand their business models. Specific information was sought on seller patterns, private label sales, ownership of dark stores in case of quick commerce startups as well as details about discounting and platform algorithms, people in the know said.
“This is on the lines of what was sought by the government from online marketplaces such as Flipkart and Amazon earlier…the government wants to understand the business models of these companies and to figure out whether they are in compliance with FDI (foreign direct investment) norms,” said one person cited above.
ETtechThe Department for Promotion of Industry and Internal Trade (DPIIT) initiated inter-ministerial consultations for the ecommerce policy in June. The government has been working on the policy since 2018 and had even floated a draft in 2019.
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Queries sent to the department of consumer affairs and the DPIIT did not elicit a response till the time of going to press.
Questions over quick commerce
The department’s move follows concerns over whether quick commerce platforms are in compliance with local laws, the sources said. They typically operate through micro-warehouses known as dark stores, which are run by third-party entities.
“There were some learnings from the regulations of online marketplaces like Flipkart and Amazon for quick commerce…the early understanding was that companies would not be able to run these warehouses internally,” an executive at a quick commerce company said.
The government is also seeking data on private label products sold on online grocery platforms to ascertain if companies were pushing their in-house brands over other products, said one person aware of the Centre’s thinking on the matter.
It is also looking to ensure that consumers are being offered choices in a transparent manner, the person added.
Quick commerce companies active in the space include Zomato-owned Blinkit, Swiggy-owned Instamart, Nexus Venture Partners-backed Zepto and Big Basket’s BBnow. Reliance Retail’s JioMart had also entered the segment but shut the JioMart Express venture down earlier this year.
Ecommerce changes
The ecommerce rules, which are being framed under the Consumer Protection Act, will look at the business practices of ecommerce players. These rules are aiming at restricting practices such as control of marketplaces over sellers, parties related or associated to a marketplace providing services or selling products.
ET had reported in March that the government is likely to issue rules stipulating that ‘related parties’ or ‘associated enterprises’ of internet marketplaces such as online retailers and food delivery platforms should not sell products or services to a registered merchant on their platforms. This would mean that companies like Flipkart and Amazon India cannot offer their in-house logistics services, Ekart and Amazon Transportation Services, to their merchants.
Goyal had said in April that the government will come out with a policy through which it will try to stop consumers from getting cheated when being asked to buy from preferred sellers during flash sales.
The ecommerce policy is looking to establish a broader framework for the sector and is expected to provide coherence among various laws and rules that govern the ecommerce sector, including the Consumer Protection Act, FDI policy, the Competition Act and the Information Technology Act. Last month, ET reported that the new ecommerce policy will bring parity between foreign and Indian marketplaces.
The government has also been pushing the Open Network for Digital Commerce (ONDC) as an alternative to private online marketplaces. Goyal had earlier urged all ecommerce platforms to join ONDC.