Read Editorial with D2G – Ep CXIV

In Read Editorial With D2G
March 31, 2016

GOOD MORNING FOLKS! IT’S A TEA TIME AND WE ARE HERE WITH OUR NEW ENDEAVOR – “READ EDITORIAL WITH D2G”. SO FRESHEN YOUR EYES, PUT YOUR PILLOWS BACK AND TAKE A SIP OF YOUR TEA WHILE ENJOYING THIS SHORT PIECE OF A NOTE.

EPISODE – CXIV
TOPIC: Disrupting the Disruptors
BLOG: The Hindu
WRITER: Editorial
GENRE: Indian Affairs

editorial

READ BEFORE YOU PROCEED:
D2G wears no responsibility of the views published here by the respective Author. This Editorial is used here for Study Purpose. Students are advised to learn the word-meaning, The Art of Writing Skills and understand the crux of this Editorial.

MEANINGS are given in BOLD and ITALIC

The decision to allow 100 per cent FDI in e-commerce entities running online marketplaces is a belated yet welcome step by the government. It clears the air a great deal on the norms governing a rapidly expanding part of the economy, and makes de jure ( De jure is used to indicate that something legally exists or is a particular thing.) what has hitherto (You use hitherto to indicate that something was true up until the time you are talking about, although it may no longer be the case) been de facto (De facto is used to indicate that something is a particular thing, even though it was not planned or intended to be that thing). Billions of dollars have already been committed as investment in the sector, and online shopping is now an established retail habit. The growth potential of the segment has drawn in venture capital and private equity investors in droves, and e-commerce players had exploited the policy ambiguities and loopholes to obtain attractive valuations for their enterprises. The latest guidelines make it clear that as long as a business entity acts purely as a marketplace, facilitating online transactions between a seller and a buyer, 100 per cent overseas ownership is allowed in the venture. Safeguards have also been specified from the marketplace operator’s perspective, so that the responsibility for both delivery and quality of the product and related warranties will lie with the seller. E-commerce firms can provide support services to sellers, including warehousing, logistics, call centres and payment collection. The rub for them lies in some of the other conditions pertaining to what the foreign-owned e-commerce marketplaces cannot do hereafter.

The imposition of a 25 per cent cap on the value that sales from a single seller and group companies can contribute to overall turnover at the marketplace means some of the largest e-commerce players will have to redraw their business strategies. The unequivocal (If you describe someone’s attitude as unequivocal, you mean that it is completely clear and very firm) assertion that any ownership of inventory by the entity running the marketplace will render (To render something in a particular language or in a particular way means to translate it into that language or in that way) its business into the inventory-based model, where FDI is barred, also makes it clear that these foreign-owned e-commerce enterprises can no longer sell wares sporting their own brand names online. And the most worrisome norm is the vaguely (If something written or spoken is vague, it does not explain or express things clearly) worded one prohibiting ventures from “directly or indirectly” influencing the sale price of goods. This is construed by most observers as a deterrent for discounts. If the idea is to level the playing field, would e-sellers be allowed to slash prices only if their offline counterparts are offering discounts? Would pricing decisions be dictated by a government nod instead of market forces? Brick-and-mortar retailers, some of whom had moved court seeking an end to the deep-pockets-backed discounts offered by e-tailers that they claimed were ruining their businesses, might be pleased. But for the consumer, strict enforcement of the guidelines could make it difficult to access value-for-money deals. E-commerce, including m-commerce spurred (If one thing spurs you to do another, it encourages you to do it) by India’s smartphone surge, have been a significant disruptor in the way domestic consumers shop. If consumers lose interest, the Centre’s guidelines could well disrupt this disruption and end up staunching (To staunch the flow of something means to stop it) the very flow of foreign capital it aims to attract.

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