Home Retail eComm marketplace model not lawful: Kishore Biyani

    eComm marketplace model not lawful: Kishore Biyani

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    founder has lashed out at ecommerce majors, saying that the latter are violating laws on foreign investment in an interview to ETRetail. Noting that the ‘marketplace’ model adopted by ecommerce companies in India differs little from brick-and-mortar formats, he said, “There is nothing different about marketplace (from brick and-mortar retail) except for accounting.””They (online retailers) sell to consumers. They are violating the law (on overseas investment) in spirit and in letter,” Biyani was quoted as saying.

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    “All retailers source almost all goods from manufacturers and suppliers,” he said. “Virtual retailers, like real retailers, store most of their merchandise or inventories in their own warehouses. How one treats this inventory in the financial accounts may differ. Some account this inventory on their own balance sheet, others account for it in their suppliers’ balance sheet. There are real-world retailers as well who do not account for the inventory on their own books.”

    And yet, companies that run brickand-mortar stores face stringent curbs when it comes to foreign investments unlike their online counterparts, he said. “Any retailer can be a marketplace and any marketplace is also retailer,”Biyani said.”In addition, in these so-called marketplaces, sellers do not directly interact nor ship goods directly to buyers. Like real retailers, virtual retailers themselves own or handle the logistics and customer delivery for everything that they sell,”Biyani said.