Amazon has been forced to pull about 400,000 products in India after they have implied new Indian ecommerce law. The regulation was first announced at the end of 2018, the purpose is to impose a ban on exclusive sales, prevents retailers from selling products on platforms they count as investors and impose restrictions on discounts and cashback promotions.
Amazon and Walmart ownedFlipkart are considered as two biggest players in Indian Ecommerce market. They are forced to overhaul their business models to comply with new rules after the Government has received complaints from traders that the US companies were violating India’s ban on foreign direct investment in “multi-brand retailing”.
Both Amazon and Flipkart have urged New Delhi to extend the compliance deadline because they need more time to prepare. But the Government on Thursday it had decided not to extend the date its original February 1 deadline.
In a statement on Friday Rajneesh Kumar, the company’s chief of corporate affairs in India said, “We are disappointed that the government has decided to implement the regulation changes at such haste.”
On Friday afternoon, Some items on Amazon were listed as unavailable including the company’s private-label brands such as Amazon Basics, home and kitchen entity Solimo and household line Presto.
“We are beginning to see customers reaching out to us because there are quite a few products that are not available on the website,” said Minari Shah, Amazon spokesperson.
“There’s much uncertainty as to what the impact of the government rule change is going to have on the e-commerce sector there,” Brian Olsavsky, Amazon’s chief financial officer, said on a call with analysts on Thursday.
Amazon lowered its sale guidance in the first Quarter because of Indian ecommerce law which makes its shares down by more than a percent on Friday. Walmart also receives a 2.4 percent decrease in sales. However, Online commerce in the country has expected to increase $100 billion per year by 2022, up from $35 billion today. But it seems like 2019 could introduce a major change in the overall ecommerce industry.