Context:
The government has introduced draft guidelines aimed at making e-commerce platforms more accountable by mandating self-regulatory measures to safeguard consumers from fraudulent practices in the growing digital shopping ecosystem.
· The draft guidelines, titled ‘E-commerce-Principles and Guidelines for Self Governance’, have been prepared by the Bureau of Indian Standards under the Food and Consumer Affairs Ministry’s supervision.
Reason for New Rules:
With the rapid rise of e-commerce, new challenges have emerged, especially concerning consumer protection and trust. The guidelines aim to address these issues by establishing clear and effective rules for self-governance, ensuring transparency and fairness across e-commerce platforms.
Key Provisions under the New Rules:
1. Pre-Transaction Requirements:
o Platforms must conduct thorough Know-Your-Customer (KYC) checks of business partners, especially third-party sellers.
o Detailed product listings must include title, seller contact information, identification numbers, and supporting media for consumers to assess the product.
2. Contract Formation:
o Platforms must record consumer consent, enable transaction review, and maintain transparent policies for cancellations, returns, and refunds.
o Diverse payment options, including credit/debit cards and mobile wallets, must be offered with full disclosure of processing charges.
o Secure payment systems with encryption and two-factor authentication is mandated.
3. Post-Transaction Guidelines:
o Platforms must adhere to clear timelines for refunds, replacements, and exchanges, with additional provisions for counterfeit products.
o The sale of banned products is prohibited, and platforms must maintain mechanisms to monitor and check sellers’ backgrounds.
o Consumer reviews and ratings must meet specific standards (IS 19000:2022), ensuring accuracy and compliance.
About e-commerce:
E-commerce (electronic commerce) refers to the buying and selling of goods and services over an electronic network, primarily the internet.
- No geographical barrier: E-commerce allows delivery of products to even the remotest parts of the country, expanding market reach.
- Lower cost: Reduced miscellaneous expenses and economies of scale help in lowering product prices.
- Personalization: E-commerce platforms offer product recommendations and feedback systems to help customers make informed choices.
- Business advantages: Expands customer base, increases sales, and facilitates convenient recurring payments and instant transactions.
Disadvantages of e-commerce:
- Security and privacy issues: Lack of robust encryption can lead to risks in protecting personal and financial data.
- Limited customer service: Resolving concerns is harder online compared to physical stores, where products can be directly examined.
- Regulatory concerns: Ambiguities in laws governing online sales can create distrust between consumers and sellers.
- Limited product suitability understanding: Online shopping doesn't allow consumers to physically interact with products, making it harder to assess suitability.
E-commerce Market in India
· India’s e-commerce market is valued at $70 billion, which accounts for around 7% of the country’s overall retail market.
· The e-commerce market in India is expected to grow to $325 billion, and the country’s digital economy is predicted to reach $800 billion by 2030.
· The number of online shoppers in rural India is projected to increase to 88 million, while in urban India; it is expected to rise to 263 million by 2026.
Factors are driving the rise of e-commerce in India:
· Factors driving the rise include increasing internet penetration, advancements in logistics and supply chain, government initiatives like the National Logistics Policy, and the growing middle-income segment.
· The government supports e-commerce through initiatives like the GeM platform, Open Network for Digital Commerce (ONDC), Digital India, Skill India, Startup India, and BharatNet to improve internet penetration in rural areas.
