India Marketplace Smackdown

India recently launched legislation that has brought quite a bit of confusion but is clearly a setback for Amazon and Walmart (Flipkart stake):

“An entity having equity participation by e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity,” the commerce ministry said in a statement.

E-commerce companies can make bulk purchases through their wholesale units or other group companies that in turn sell the products to select sellers, such as their affiliates or other companies with which they have agreements.

The ruling implies that marketplaces such as Amazon and Flipkart will not be able to offer their own private label products or exclusive products on their respective platforms. All vendors will have to be provided the same terms and no vendor can be forced to exclusivity. I would assume Amazon and Flipkart will contest the ruling before the February 1, 2019 enforcement date.