Ecommerce businesses

Government makes it mandatory for the e-tailers to display the country of origin on all products

While there’s a new nationwide awareness wave against the products of a specific Asian nation, a recent move by the Indian government aims at curbing all those e-tailers who sell their products without disclosing its country of origin. In addition to it, they will have to appoint grievances personnel for addressing consumer issues. The Food and Consumer Affairs minister also said that those who e-commerce stores who fail to meet the norms will be liable for strict penal action.

What led to the new rules?

The new consumer protection rules were well anticipated due to the flooding of the stores with cheap and inferior quality products. Sellers used to import such products on dirt-cheap prices from mass-producing countries and then re-branded them for final sale through the e-commerce sites. Let us have a quick look at all those reasons why the need for strict regulations arose in the first place:

  • No information about the country of origin and import: Very often, sellers didn’t display the country of origin and importer details and guarantees related to the authenticity of the product. While the selling parties were always on the profit-making side, it is the consumers who suffer.
  • Opaque return and refund policies: While the major brands have dedicated return and refund policies regarding their products, such policies were rare for unpopular products. It is common for a customer to end up with an unsatisfactory product after investing their money, but when they wished for return or a refund, the sellers used to turn their backs to them.
  • Anonymous sellers selling unscrupulous goods: In a few e-commerce businesses in India, many sellers used to import bad-quality products and sold them under an unknown brand. It was a typical case for electronics goods, and mobile accessories were among the most faked products on e-commerce sites.

Consumer Protection (E-Commerce) Rules, 2020

The three factors discussed above have formed the baseline of the Consumer Protection (E-Commerce) Rules, 2020. The consumer affairs ministry has argued that they are willing to take stringent actions against the violators as they are committed to build a healthy environment for e-commerce retail in the country and protect the consumers against malpractices of the sellers and e-commerce business owners.

Furthermore, the industry ministry is also working upon an e-commerce policy, which is expected to focus on the following parameters:

  • Set of rules to drive the e-commerce industry: The recent jump in the scale and magnitude of the e-commerce industry has given rise to the need for a dedicated policy. India has a vast customer base for e-commerce businesses, and a well-regulated e-commerce policy can solve most of the ongoing issues.

●        Prevention against malpractices: As an industry grows in size and value, more people want to churn maximum profits from it, while some of them also resort to illicit methods to generate more profit. With a dedicated e-commerce policy in place, the strict penalties will prevent such occurrences and keep the environment customer friendly.

●        Fair opportunities and healthy competition: A decade ago from now, there were fewer players in the e-commerce industry, but the scenario has changed now. With dozens of new players in the arena, authorities aim to ensure fair opportunities for all and stopping predatory business practices by the giants.

Way forward

Prescribing several duties of sellers on the marketplace, the ministry, in its official statement said, “No seller offering goods or services through a marketplace e-commerce entity shall refuse to take back goods, or withdraw or discontinue services purchased or agreed to be purchased, or refuse to refund consideration if paid, if such goods or services are defective, deficient or spurious, or if the goods or services are not of the characteristics or features as advertised or as agreed to, or if such goods or services are delivered late from the stated delivery schedule.” The new set of rules will undoubtedly impact the e-commerce business in India in a positive way.

The new rules make it mandatory for the seller to have a written contract with the respective e-commerce business to initiate a sale through their platform, and any shortcut arrangement will be deemed invalid. The grievance officer will take care of the customer complaints within 48 hours and redress it within a month of receiving it.

Lastly, the e-commerce entities will have to take responsibility for the authenticity of the advertisements of the goods and services on their website. However, the updated policy is still only the first step towards regulating the e-commerce business in India, as there are still many challenged which await redressal.