‘No flash sale ban, e-tailers need not worry’
The Union government on Tuesday said it was not looking to ban routine flash sales on e-commerce platforms popular with shoppers under proposed new rules.
vHowever, the proposed new rules do seek to clamp down on predatory and shady flash sale events that stifle competition and limit consumer choice, according to Khare. “But there is no finality to the draft yet and we are open to suggestions and changes till July 15,” she said.
The government had on Monday made public a set of proposed rules which seek to make substantive changes in the way online marketplaces operate.
A proposal seeking to prohibit flash sales created a flutter. Clause 16 of the draft reads: “No e-commerce entity shall organize a flash sale of goods or services offered on its platform.” Flash sales are essentially instant, heavily discounted, time-bound sale offers. The proposals also seek to offer level-playing field to India-made products and protect domestic producers from any discrimination. Consumers should be able to use a filter on websites to sort products by country of origin, the draft rules state.
The official said only “fraudulent flash sales” that depart from normal course of business activity and manipulate software to exclude one or more sellers to give preferential treatment are being sought to be curbed.
“Only such specific selling is to be prohibited. Shell companies have been found to use such sales to form a front and create an environment in which cheapest goods are provided by invariably limiting competition and restricting consumer choice,” Khare said.
But consumer rights experts aren’t pleased with the new rules. “The key thing is to always ensure fair competition. But frequently shifting the goalposts doesn’t do much good. The flash sale rule, for instance, is part of an old mindset that denies consumers the benefit of low pricings,” said Pradeep Mehta, a consumer-rights expert who had been consulted by the NDA government while drafting the Consumer Protection (Amendment) Bill 2019. Nevertheless, people in the industry were a bit sceptical. “Although it’s good that conventional online sales are not banned, this policy will have an impact on consumers...who are very cost sensitive,” said Mehul Jobanputra, the co-founder of desidime.com, an online marketplace with a deals-led selling strategy.