CCI Releases ‘Market Study on E-commerce in India’

News:The Competition Commission of India(CCI) has released a Report titled ‘Market Study on E-commerce in India: Key Findings and Observations’.

Facts:

Key takeaways from the study:

  • The E-Commerce Sector was established in 2009.However, the sector gained momentum in 2014. 
  • In 2017, the sector held 3,500 million USD investment.There are around 4757 E-commerce start-ups in India today in 2019.
  • The revenue from the E-Commerce sector is growing at the rate of around 51%. 
  • In July 2018, the number of online transactions in the E-Commerce sector was 1 million to 1.2 million per day.

Problems in the E-Commerce Sector:

  • Deep Discounting:The study said that in e-commerce platforms,deep discounting was the key factor influencing competition.The discounts are so high that it impairs the ability of brick and mortar players to compete in the market.
  • Contract Terms:The study has also found that online platforms exercised superior bargaining position by imposing unfair contract terms on sellers.
  • Data Collection:There is also a lack of transparency on the data that is collected on the platforms and shared with third-party entities.
  • Manipulation:The study has also noted that there are three elements which are susceptible to manipulation by E-commerce platforms namely the search results, sellers’/service providers’ data and user review/rating mechanisms.

Recommendations to E-commerce Companies:

  • To reduce information symmetry and increase transparency.This will increase competition among the stakeholders
  • To set out terms and conditions that will prevent the business users from influencing search ranking. 
  • To set up a transparent policy on data collection of customers, product rating policies.

Additional information:

About Competition Commission of India:

  • Competition Commission of India is a statutory body of the Government of India established in 2003.
  • The commission is responsible for enforcing the Competition Act,2002 throughout India and to prevent activities that have an appreciable adverse effect on competition in India.
  • CCI consists of a Chairperson and 6 Members appointed by the Central Government.

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