The Confederation of Indian Industry (CII) has engaged cloudBuy.com as the platform for their new gateway to global supply chains initiative (connecting buyers and sellers around the world).
Given the government's clarification in this area, CII's decision to move forward with cloudBuy has proved to be a very logical move, as there will be no requirement to unpick work already done, or try to change the legal status of any supplier arrangement.
Meanwhile, the government issued a short and unequivocal policy clarification on March 29 which makes clear their stance on marketplaces. It comes after months of uncertainty around the role of marketplaces, with all of the attendant issues around stock holding, discounting and tax. The crux of the matter is who the end customer is dealing with when they buy from a marketplace - the marketplace owner or the end seller and it has been very confusing.
The policy note issued was clear that marketplaces are technology providers not online department stores and they need to behave in this manner, not discount houses who can control pricing, supply chain and ultimately entire markets.
Nilesh Gopali, Country Head, cloudBuy PLC, said, "We welcome the clarification." Working in this area, we could see that there was real confusion about what a marketplace is. The big brands are more than technology providers, they are effectively sellers with a raft of suppliers sitting behind the brand. cloudBuy is exactly what the government is describing as it is a pure play technology provider that connects buyers and sellers, but does not in any way seek to influence the transaction," he added.
Even the very largest players must be concerned as this policy comes into place and smaller organisations that have gone down the marketplace route will be understandably worried about their capability to technically architect a compliant solution. Some may be worried about the cost and time required to rework their existing platforms and questioning the viability of what they have put into place.
More From This Section
Gopali suggests that this is not as big a challenge as it might seem 'the technology exists to morph these marketplaces to meet government requirements, from a cloudBuy perspective we can get a branded marketplace up and running in a matter of weeks so the capability isn't a problem. The bigger challenge will be the business model that underlies the marketplace and unpicking existing commercials to meet the government's requirements'.
"Whatever happens this is a landmark piece of policy and it will change the dynamic between buyers and sellers forever in the Indian ecommerce landscape," he added.