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CCI report: ‘Market Study on E-commerce in India:Key Findings and Observations’ released

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On January 08, 2020 the Competition Commission of India (CCI)  released a report titled “Market Study on E-commerce in India:Key Findings and Observations” after it was initiated by CCI in April 2019 for better understanding a functioning of e-commerce in India. The study was also launched to identify impediments (obstructions) to competition.
E-commerceStudy findings:

i.Revenue sector:  Revenue from the e-commerce sector is expected to increase from $39 billion in 2017 to $120 billion in 2020,  growing at an annual rate of 51%, the highest in the world.

ii.Internet sector:  The no.of internet users have increased from 445.96 million in 2017 to 665.31 million in 2019 and is also expected to increase to 829 million in 2021.

iii.Goods sector:  E-commerce in the goods category in India has grown at a compound annual growth rate (CAGR) of 57% in the last 7 years, and is expected to grow by 18.6% till 2022

iv.Food sector: The food tech industry in India is estimated to grow at a CAGR (Compounded Annual Growth Rate) of more than 12% between 2016 and 2021.

  • 83% of the respondent restaurants reported to have an online presence. Their online sales accounted for on an average nearly 29% of the respondent restaurants’ revenue.

Market Study on E-commerce in India:

i.The study is a combination of secondary research, questionnaire survey, group discussions, one-on-one meetings etc covered in 3 categories of e-commerce in consumer goods, accommodation services and food services.

ii.Participation: 16 online platforms, 164 business entities and 7 payment system providers participated in the study. 11 industry associations, representing different stakeholder groups, also participated in the study.

iii.Key issues discussed in the study: Issues that directly or indirectly have a bearing on competition were discussed. These include issues of lack of platform neutrality, unfair platform -to-business contract terms, exclusive contracts between online marketplace platforms and sellers/service providers, platform price parity restrictions and deep discounts.

  • These issues would lend case-by-case examination by the CCI under Competition Act 2002.

iv.Transparency measures for e-commerce platforms: The transparency measures include

  • Search ranking- General description of the search ranking parameters should be drafted in plain and intelligible language with up to date prescriptions.
  • Collection, use and sharing of data-  A policy on the data should be set.
  • User review and rating mechanism-  This has to be done to ensure information symmetry, which is a prerequisite for fair competition.
  • Revision in contract terms- The contract should be revised in a timely manner and revision should not be implemented before expiry of a notice period.
  • Discount policy-  A clear and transparent policy on discounts should be brought up. Click here to know more. 

About Competition Commission of India(CCI):
Founded- 14 October 2003.
Headquarters- New Delhi.
Chairperson- Ashok Kumar Gupta.
First executive- Dhanendra Kumar.