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Several MSME sellers not aware of any govt policy regulating e-commerce in India: Survey

Ease of Doing Business for MSMEs: Currently, there is no single piece of legislation addressing e-commerce issues in India.

The government is expected to launch the revised draft e-commerce policy and rules this year.

Ease of Doing Business for MSMEs: Even as India?s e-commerce market continues to grow in size and scope for MSMEs selling on marketplaces, a number of sellers, however, know little about existing laws governing e- commerce in the country. According to a survey of small sellers — selling goods

on  online  platforms  such  as Flipkart, Amazon,  and  others  — released  by

Research firm CUTS Institute for Regulation and Competition (CIRC) on Friday, 71 per cent were not aware of any government policy regulating the e-commerce sector. “This indicates a need to sensitize small sellers about e-commerce onboarding as well as the e-commerce policies in India and their rights,” the survey said.

“For MSME sellers, the market to sell goods has become much bigger through e- commerce. However, a lot of information dissemination (about existing laws), and capacity building should happen to make sellers aware of the manner in which e- commerce works. E-commerce companies should also be more transparent in the manner in which they conduct business,” Arvind Mayaram, Chairman, CIRC and Former Finance Secretary of India told Financial Express Online.

Currently, there is no single piece of legislation addressing e-commerce issues in India. The laws are fragmented into different rules, acts and policies such as the Consumer Protection Act, FDI laws, Personal Data Protection Bill, etc. However, work has been underway on the national e-commerce policy for around three years. The government is expected to launch the revised draft e-commerce 

policy and rules this year reportedly focusing on having an e-commerce regulator as well.

“While regulations will play their own role but e-commerce policy must be developmental in approach. This means it should promote the growth of e- commerce by the ease of entry, ease of doing business, and reducing the compliance burden. Regulations have to be light-touch much like they were for the IT sector back in the 1990s that helped the sector flourish. There should be ease of failing as well in e-commerce,” added Mayaram.

Among key asks by sellers in the survey included a policy mapping the products to genuine sellers in order to check plagiarism in products and revising the return policy to reduce losses to sellers as customers often return the product after using it for a few days. “The losses are higher in case a customised product is returned,” the survey added.

The findings also revealed the key motivation for sellers to onboard e-commerce platforms. For 64 per cent of the sellers, access to a wider customer base and selling beyond geographical boundaries were the prime reasons followed by 

keeping up with technological evolution and sustaining business during the lockdown.

In terms of digital growth, online sales account for nearly 85 per cent of the total sales for a majority of respondents. “Some respondents have reported that their online customer base is significantly higher than their offline store. Half the respondents reported offering discounts on online platforms only. One of the reasons for this might be that they face higher competition online than offline, and discounts are a way to get more customers,” the survey report added. Moreover, during the festive season, as many as 71 per cent respondents reported that the discounts offered during sales events on e-commerce platforms also help in increasing their sales.

According to CUTS, the survey was conducted among 14 small sellers to gauge their e-commerce experience. On the consumer side, responses from 331 respondents were also analysed. 83.08 per cent respondents reported that they get more deals and discounts online as compared to offline retail stores. Moreover, 79.46 per cent said that they find online reviews about the products useful while shopping online.