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 . The e-commerce sector in India evolved without clearly articulated policies, mainly because the country’s commerce laws predate the advent of the industry there. 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 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.