A new rule being implemented by the Indian Government will put Flipkart and Amazon in a fix: India has allowed 25% foreign direct investment (FDI) in online retail firms that operate as marketplaces, however, FDI will not be allowed in inventory-based models, where the firm owns the goods that are being sold through its platform. A majority of the large e-commerce firms in India are marketplaces, but they will not be permitted to have 100% of their sales come from one vendor. Flipkart 's platform is Flipkart subsidiary, WS Retail , which analysts say is easily above the 25% threshold, while 40% of sales on Amazon come through Cloudtail India - a joint venture between Amazon.com and Catamaran Ventures . Furthermore, the rules also state the marketplaces will not be permitted to influence the selling price of goods and services on their platform; online retail in India presently relies on deep discounting. On the other hand, Snapdeal has embraced the rules: unlike the other one it does not have a single large seller.
A new rule being implemented by the Indian Government will put Amazon and Flipkart in a fix: India has allowed 100% foreign direct investment (FDI) in online retail firms that operate as marketplaces, however, FDI will not be allowed in inventory-based models, where the firm owns the goods that are being sold through its platform. A majority of the large e-commerce firms in India are marketplaces, but they will not be permitted to have over 25% of their sales come from one vendor. Flipkart's platform is Flipkart subsidiary, WS Retail, which analysts say is easily above the 25% threshold, while 40% of sales on Amazon come through Cloudtail India - a joint venture between Amazon.com and Catamaran Ventures. Furthermore, the rules also state the marketplaces will not be permitted to influence the selling price of goods and services on their platform; online retail in India presently relies on deep discounting. On the other hand, Snapdeal has embraced the rules: unlike the other two it does not have a single large seller.