New FDI norms to end aggressive discounts by e-tailers: Goldman

Moneycontrol BureauIf you are planning to buy that long desired electronic gadget or branded apparel online, it would be a good idea to snap it up without much delay. For chances are that you may not get as good a bargain once the new e-commerce rules kick in.“We believe restrictions on e-commerce marketplaces from directly/indirectly influencing the sale price of goods or services and guidelines on maintaining a level playing field suggest e-tailors may not be allowed to offer discounts or cash back on goods or to incentivize sellers to discount goods in lieu of other services,” says a note by broking firm Goldman Sachs.“As such, this could spell an end to current aggressive pricing and discounting- led competition to acquire and retain customers,” the note says.According to Goldman, the restrictions on discounting may force companies differentiate themselves through services and focus on profits instead of gross sales.Industry watchers feel this could further shrink the bloated valuations of many e-commerce players in the short run.Last month, one of the Morgan Stanley managed funds trimmed the value of its holding in Flipkart by 27 percent.The Morgan Stanley fund said in its regulatory filings with SEC that it had valued Flipkart stake at USD 58.93 million in December 2015, as compared to USD 80.62 million in June 2015.