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Progressive Grocer April 2016

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A flurry of policy decisions in recent days has made the industry reverberate – both in anticipation as well as trepidation. The decision allowing 100 per cent FDI in online retail of goods and services under the ‘marketplace model’ has been generally acclaimed, while rules prohibiting marketplaces from offering discounts, and capping total sales originating from a group company or one vendor at 25%, have led to much heartburn. The reactions have been along predictable lines though, depending on which side of the fence one is sitting on. However, the notification is in itself a cataclysmic move with the potential to shift the tectonic plates of the e-commerce industry.

Following the announcement, the industry is abuzz that global online megaliths such as China’s Alibaba and Japan’s Rakuten are giving final touches to their plans to make a splash in the Indian market. For these global biggies, India is definitely the destination of choice and a huge market to grow their business. Industry estimates show that e-commerce sales in India are expected to grow from $14 billion in 2015 to $55 billion in 2018.

Though a degree of turbulence and ‘creative destruction’ might be the logical deneoument in the wake of the new rules coming into force, I share an implicit trust in the genius of our young entrepreneurs. So despite the parsing and combing for nuances in the thicket of new rules, I hope the industry will not break its stride and continue to find innovative ways to unleash and harness its potential.

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