Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do. There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Now as I approach my 90th birthday ( 27 June 2023 ) , I invite you to visit my Digital Avatar ( www.hemenparekh.ai ) – and continue chatting with me , even when I am no more here physically

Thursday, 2 August 2018

#ECommerce #FDI # The E Commerce Elephant




There is an old story about 7 blind men trying to figure out the shape of an elephant by touching different parts of the body of an elephant and based on that , trying to imagine what the full elephant might look like


Something similar is happening over the past few days since draft of E Commerce Policy got released


With one difference


All the wise men ( and there are more than 7 ),are saying :


 “ E Com Policy should NOT look like this “




Following are some of their comments :


(1)   “ Single Regulator / single Law “ , is a stupid idea . It will slow down decision-making


(2)   Differential voting rights for Start Ups may discourage FDI


(3)   Digital Economy is not something STATIC . It is continuously EVOLVING


(4)   Should there be separate laws for contract enforcement ? One for normal commerce
       and another for E Commerce ?


(5)   It is not government’s job to micro-manage the prices


(6)  Why should Import Duty differ for goods imported via ELECTRONIC  vs  NORMAL
       methods ?


(7)  Why should an officer certify eligibility , instead of leaving it to the players which model
       to follow ?  [  Inventory-led  or Marketplace  ]


(8)   Why should Government get into the business of launching E Commerce Platform ?


(9)   The policy is creating an Uneven Playing Field , between Foreign Companies and
        Domestic Companies


(10)   Why should only Domestic Companies have the option of holding inventories ?

          [  provided goods sold are entirely domestically produced  ]


(11)   How can government keep changing “ Regulatory Goal Posts “ ?


(12)   This smells of re-introduction of License Raj  !


(13)    Is it government’s job to decide WHO shall offer WHAT promotion scheme and
          WHEN ?


(14)    What is the idea behind saying :

        *  Group companies of an E Commerce firm cannot take actions that influence / distort
            final process

       *   Bulk purchases by “Related party sellers” of branded goods that lead to “ price
            distortions “ shall be banned

  
  (15)   How can Regulator fix floor-prices and prohibit deep discounts below a threshold
           when technological advances [ eg : 3D Printing – Use of Robots – AI etc ] are
           continuously lowering manufacturing costs ?


           What is rationale behind fixing a specific sunset date after which “ deep discounts “
           must stop ?  Large E Commerce firms in India are mostly owned by the American /
           Japanese / Chinese  companies . If they are bringing in and pouring dollars / yen /
           yuan , to offer deep discounts to Indian consumers , why should you bother ?
  
         
           Why should the consumers be deprived of continuous lowering of manufacturing
           costs ?


(16)    Discounts are offered by the Vendors and not the E Com Platform. How will you
          control them ?


(17)    What is idea behind allowing 49 % FDI in only those Online Companies which sell
          Indian goods ?

          This recommendation goes against earlier Press Note # 3, which must not be diluted


(18)   Data generated by E Commerce Firms :

         Where is the need for a separate framework exclusively for E Com firms when that
         subject is fully covered by the SriKrishna Committee ( Data Protection Law ) who has
         recommended a Data Protection Authority ( DPA ) ?


 (19)   Govt should view retail from a multi-channel lens and laws that apply to one channel
          should apply to other retail formats as well – whether OFFLINE or ONLINE
 
          ( Retailers Association of India - RAI )



 (20)   Kumar Rajagopalan [ CEO – RAI ] says :

          “ There are many issues and ambiguity with the policy, including the DEFINITION of
          E COMMERCE .

         There is no clarity on who is an e commerce player now . Almost every retailer in the
         country uses technology and supports online buying and delivery

         Can everyone be called e-commerce then ?
         The new draft suggestion seems to be dividing retail by channels, which are creating
         confusion even from an FDI angle “




What is heartening is that the Government has invited all stake-holders to send in their suggestions re changes / modifications that they would like to be incorporated


Over the past 3 YEARS , I have sent my own views to the Policy Makers through following emails . Once again , I urge all the stake-holders to consider these :

 

Defining E – Commerce                                  [  14  July  2015  ]

 

 

If You cannot lick them ; Join them                  [  24  July  2015  ]

 

 

WHO WILL OBSOLETE WHOM ?                        [  20  Aug  2015  ]

 

 

E - Commerce is Easy Commerce !                   [  15  Nov  2015  ]

Not an easy task to define what is E Commerce ( and what is not ), considering all the possible permutations / combinations ( running into LAKHS of them ! ) , of the following elements :


#    NATURE


      *  A physical " Product " ( Capital Goods / FMCG / Consumables / Perishables )

      *  A virtual " Service "    ( Medical advice / Legal advice / Consultancy / Software etc )



#    GEOGRAPHIC   SPREAD


     *   Across National boundaries    ( International Trade )

     *   Across State boundaries        ( within India )

     *   Across Municipal boundaries   (within a State )



#    SUPPLY- CHAIN   /  INTERMEDIARIES


     *   Mfr  >  Distributor  >  Dealer  >  Retailer  >  Buyer

     *   Mfr  >  Buyer

     *   Any disintermediation in the above chain



#     ORDER  PLACEMENT  /  ACCEPTANCE


     *   In a physical location ( Shop / Store / Office / Factory / Home )

     *   In a virtual location   (Web site/Mobile App/SMS/ Email / Phone / Video Conference  )



#     DELIVERY


     *   Physically in a Shop / Store etc where Buyer collects / picks-up from shelf

     *   Delivered to Buyer's location, thru Delivery Boy

     *   Delivered to Buyer's location, using a Drone

     *   Delivered to Buyer on his home-based 3D Printing Machine  ( using internet )



#    PAYMENT


     *   Cash against delivery

     *   Pre-paid / Post-paid Cheque

     *   Credit / Debit Cards across counter

     *   Credit / Debit Cards thru online Payment Gateways

     *   Through Mobile Wallets

     *   Electronic Bank Transfer

     *   Using Virtual Currency like Bit-Coins

     *   Barter of Goods or Services



#    FOREIGN   INVESTMENTS


    *   FDI in Manufacturing / Supply Chain / Payment Gateways - Apps-  Mobile Wallets 

    *   FDI in Web sites like Amazon - Flipkart - Alibaba - Snapdeal etc ( What percentage ? )



Can you think of any other " Elements " that I have forgotten  ?


In any case , given the fact that there can be lakhs ( if not millions ) of permutations / combinations of the above-mentioned elements , one must not attempt to define what is E Commerce ( and what is not ) , by inclusion or exclusion of these elements in definition


Such a complex definition would lead to thousands of court cases involving Governments and each court interpreting the definition , differently  !


The ONLY DEFINITION that would satisfy ALL  of these permutations/combinations , is :

-----------------------------------------------------


Any exchange of " Value " between any number of parties , involving ,


Goods or Services , on the part of one party


with,


Money or its equivalent consideration , on the part of a second party


with or without using,


Intermediary services , on the parts  of any other parties



Lessons from History ?                                  [  07 Jan  2016 ]

 

 

One Day , Everything will Sell Online !            [  29  Mar  2016  ]

 

 

Missing the Woods for the Tree ?                     [  12  Aug  2016  ]

 

The best that the Committee can recommend is adoption of the following :


-------------------------------------------------


Parekh's , " 3  Laws of E-Commerce Economy "

- to be incorporated as 123rd Constitutional Amendment

( with apologies to Isaac Asimov's 3 Laws of Robotics ! ) :


-----------------------------------------------


LAW  #  1 :

Asimov :

     A robot may not injure a human being or, through inaction, allow a human being to come to harm.


Parekh :

Rules / Regulations of E-Commerce shall not come in the way of unfettered creation of SELF EMPLOYMENT
    
Any existing Law / Rule / Regulation that hinders a person to become Self Employed, shall be treated as ultravires


Further , any Law / Regulation of " E-Commerce / FDI " which slows down Investment ( Foreign or Local / Official or through channeling of BLACK MONEY ), shall be treated as " bad in law " and struck down



-------------------------------------------------------------------------


LAW  # 2
   

Asimov :

     A robot must obey the orders given it by human beings, except where such orders would conflict with the First Law.
       


     Parekh :

     Laws / Regulations governing " E-Commerce / FDI " shall be subservient to Laws / Regulations governing , 
   
      " Commerce / Investment " .

     Whenever any Public Authority / Court finds conflict between the two , laws / regulations governing " Commerce / Investments " , shall prevail under all circumstances , and in favor of the self employed


     ------------------------------------------------------

     LAW  #  3

     Asimov :   

     A robot must protect its own existence as long as such protection does not conflict with the First or Second Laws.


    Parekh :

     Laws / Regulations of " E-Commerce / FDI " which get over-ruled under  LAW # 2 , shall immediately " Self Destruct " in favor of unobstructed progress of  TECHNOLOGIAL ADVANCES

 



  

 

 

Level-Playing Field is a Double Edged Sword !         [  8  Feb  2017  ]

 

 

A New Way to E-Way ?                                          [  15  July  2017  ]

 

 

3 Laws of E – Commerce                                         [  04  Dec  2017  ]

 

 

E Commerce Definition : a Space Ship ?                    [  5  July  2018  ]

 

 

03  Aug  2018

www.hemenparekh.in / blogs

 

 

 

 

 

 



        
 


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