If you are looking to buy Amazon‘s Echo range of speakers in India, you may have to wait for about 15-30 days.
The devices, which weren’t available on Amazon.in until the early hours of Friday, is now available through sellers such as Hariom Communication LLP and 4 U Marketing, signaling a restructuring of seller entities underway at Amazon India.
At the time of writing this article, the devices are available with a waiting period of 15-30 days, a far cry from the usual 1-2 days deliveries.
The online retail giant had earlier pulled down all product listings from its preferred sellers Cloudtail and Appario Retail, in compliance with the new e-commerce FDI rules kicking in from today. This affected the availability of the company’s own devices and private label products from brands such as Symbol, Myx, and Solimo. While the devices are now available for purchase, the private label products are still not available at the moment.
The e-commerce giant’s hyperlocal offering Prime Now is also no longer offering groceries and electronic products from the company-fulfilled NOW store, while products from its supermarket chain partners like Big Bazaar, Star Bazaar, and More continues to be available for purchase.
In an earnings call with analysts on Thursday, Brian T Olsavsky, Chief Financial Officer at Amazon, said that the changes to the laws in India would impact price, selection, and convenience for its customers as well as sellers in India.
“There is much uncertainty as to what the impact of the government rule changes is going to have on the e-commerce sector (in India). We remain committed to complying with all laws and regulations but we are evaluating the situation,” Olsavsky said.
Cloudtail and Appario were setup as joint ventures between Amazon.com and NR Narayana Murthy’s Catamaran Ventures and Patni Computers promoter Ashok Patni Group, respectively. The US online retail giant has a 49% holding in both the joint venture entities which acted as sellers on its platform.
The revised FDI norms notified by the government on December 26, disallows sellers in which a marketplace has direct or indirect equity participation from selling on those platforms. While it also categorises sellers who drive more than 25% of their overall sales from a single marketplace as entities of that marketplace, the full impact of the second change isn’t yet known.
While Cloudtail and Appario did sell non-Amazon branded products as well, being a marketplace the same products were being sold by other third-party vendors, ensuring they are still available on the marketplace. However, it is to be seen what the impact on price and express shipping on these products will be, as many of the discounts and Prime ratings were controlled by the two in-house sellers.
“The new regulations need to be interpreted, (and we) need to make sure they don’t have unintended consequences,” Olsavsky replied to another question from an analyst during the company’s Q4 earnings call. “We’re still evaluating the situation in India, (but) we still feel very good about the long term prospects.”
The impact of the government’s rule change was less noticeable on Flipkart. The company had a few years ago made a conscious decision to move away from driving sales through its in-house retailer WS Retail. Instead, Flipkart today drives bulk of its sales from third-party sellers who buy directly from its wholesale arm and sell the items to consumers on its platform.
While the new rules seek to prohibit this as it provides the marketplace with undue control over pricing and availability of products it sells, the impact of this isn’t fully understood as yet on both Amazon and Flipkart. Analysts told ET, on Thursday that both Amazon and Flipkart still drive over 50% of the sales on their platforms either through captive sellers or through this indirect selling route.
“We are disappointed that the government has decided to implement the regulation changes at such haste, but we are committed to doing everything we can to be compliant with the new rules. Despite the significant work that is required to change our supply chains and systems, we are also confident that we will continue to serve our customers and sellers to the standards we and they are used to,” a Flipkart spokesperson said.
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