Discounts outlawed – No authority for Retailer to decide the price

In a recent press meet RBI Governor has warned the E-commerce to slow down the discounts, he mentioned that E-commerce retailers are just getting the returns but not the profits with their discounts. So according to DIPP’s new policy, a retailer no more has the authority to decide the price of a commodity. However the manufacturer can decide if he wants to sell the product at a discounted rate. This will help the Retail market to sustain and there won’t be any huge differences in the online price and retail price. The compliance of this policy is questionable, when asked about this new policy to an executive of one of the India biggest Online player he simply mentioned it as “The nightmare”, he also quoted that “E-commerce industry is already facing lot of issues with Competition Commission of India (CCI) for the prices and it is sad that they mark the E-commerce prices as ‘Predator pricing’. We will think how to go ahead with this new policy”. When the business models were studied deeper there is a win-win situation of Online and Retail stores with this new policy. The success might depend on how people accepts the same.