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Last Updated : Dec 27, 2018 06:28 PM IST | Source: Moneycontrol.com

FDI changes in e-commerce unlikely to impact jobs

The government in its FDI policy has said that e-commerce player cannot offer heavy discounts nor can have exclusive partnerships for sales

M Saraswathy @maamitalks

The new foreign direct investment (FDI) policy in the e-commerce sector may not impact jobs immediately, according to human resource experts.

While the government has barred companies from exclusive tie-ups with portals and offering bumper offers during festivals, jobs could continue to grow.

Mayur Saraswat, Head Sales-Digital, TeamLease Services told Moneycontrol the move is unlikely to impact jobs even though e-commerce players could be required to tweak their business models.

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The new FDI policy released by the government on December 26 aims to protect the interests of local businessmen, who had accused the online marketplaces of butchering their revenue. However, as a side effect, consumers may have to part ways with the bumper discounts on elite brands in fashion and electronics, especially smartphones which come up every year around Diwali.

A bulk of the hiring used to be done during the festive season corresponding to the sales of the products as well. However, even if the companies are disallowed from offering deep discounts, Saraswat said smaller towns continue to buy products from online platforms since they are accessible.

“E-commerce has addressed/created a new market. Products have been brought to the vicinity of customers. Even in the recent sales period, it has been seen that about 40 percent of sales for the players have come from Tier II/III locations,” he added.

The changes have been made to provide clarity to the FDI policy on e-commerce sector and will be applicable from February 1, 2019, according to a statement by Department of Industrial Policy and Promotion.

The human resource officer of an indie fashion e-commerce portal said they are studying the regulations but will continue to hire people to meet the demand. Sales could be marginally impacted when the regulations are implemented, but the need to hire will be high since attrition is high in this segment, he said.

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First Published on Dec 27, 2018 06:28 pm
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