Market Study on E-commerce in India
Mains Paper 3: Economy
Prelims level : Competition Commission of India
Mains level : Highlights about the market Study on E-commerce in India
- The Competition Commission of India (CCI) released a Report titled
‘Market Study on E-commerce in India:
- The Market Study on E-commerce in India (‘the study’) was initiated by
the CCI in April 2019 with a view to better understand the functioning of
e-commerce in India and its implications for markets and competition.
- The objective was also to identify impediments to competition, if any,
emerging from e-commerce and to ascertain the Commission’s enforcement and
advocacy priorities in light of the same.
Key findings of the study:
- The study, a combination of secondary research, questionnaire survey,
focused group discussions, one-on-one meetings, a multi-stakeholder workshop
and written submissions of stakeholders, covered the three broad categories
of e-commerce in consumer goods (mobiles, lifestyle, electrical and
electronic appliances and grocery), accommodation services and food
- 16 online platforms, 164 business entities [including sellers
(manufacturers and retailers) and service providers (hotels and
restaurants)] and 7 payment system providers from across India participated
in the study. In addition, 11 industry associations, representing different
stakeholder groups, also participated.
- The study has helped gather useful insights and information on the key
features of e-commerce in India, the different business models of e-commerce
players, and the various aspects of commercial arrangements between market
participants involved in e-commerce.
- The study has also provided an opportunity to learn from business
enterprises on how they are responding to the advent of digital trade and
has helped gauge the key parameters of competition in digital commerce.
- The study confirms that online commerce is gaining importance across the
sectors studied. The share of online distribution and its relative
importance vis-à-vis traditional channels varies significantly across
- This divergence constrains construction of a unified competition
narrative and points to the need for product-specific assessment of market
and competition dynamics. Online commerce, as the study shows, has increased
price transparency and price competition.
- The search and compare functionalities of online platforms have lowered
search cost for consumers and have provided them with a wide array of
alternatives to choose from. For businesses, e-commerce has helped expand
market participation by aiding innovative business models.
- The report released today presents the key trends identified and also
discusses the issues that may, directly or indirectly, have a bearing on
competition, or may hinder realisation of the full pro-competitive potential
- These include the issues of lack of platform neutrality, unfair
platform-to-business contract terms, exclusive contracts between online
marketplace platforms and sellers/service providers, platform price parity
restrictions and deep discounts.
- The CCI is of the view that many of these issues would lend themselves
to a case-by-case examination by the CCI under the relevant provisions of
the Competition Act, 2002. The report outlines these issues and presents the
observations of the CCI on the same without assessing whether a conduct is
anti-competitive or is justified in a particular context.
- Ensuring competition on the merits to harness efficiencies for consumers
- Increasing transparency to create incentive for competition and to
reduce information asymmetry
- Fostering sustainable business relationships between all stakeholders
- Set out in the platforms’ terms and conditions a general description of
the main search ranking parameters, drafted in plain and intelligible
language and keep that description up to date.
- Where the main parameters include the possibility to influence ranking
against any direct or indirect remuneration paid by business users, set out
a description of those possibilities and of the effects of such remuneration
- Introduction of the above-mentioned features, however, should not
entail, disclosure of algorithms or any such information that may enable or
facilitate manipulation of search results by third parties.
Collection, use and sharing of data:
- Set out a clear and transparent policy on data that is collected on the
platform, the use of such data by the platform and also the potential and
actual sharing of such data with third parties or related entities.
User review and rating mechanism:
- Adequate transparency over user review and rating mechanisms is
necessary for ensuring information symmetry, which is a prerequisite for
fair competition. Adequate transparency to be maintained in publishing and
sharing user reviews and ratings with the business users. Reviews for only
verified purchases to be published and mechanisms to be devised to prevent
Revision in contract terms:
- Notify the business users concerned of any proposed changes in terms and
conditions. The proposed changes not to be implemented before the expiry of
a notice period, which is reasonable and proportionate to the nature and
extent of the envisaged changes and to their consequences for the business
- Bring out clear and transparent policies on discounts, including inter
alia the basis of discount rates funded by platforms for different
products/suppliers and the implications of participation/non-participation
in discount schemes.
Q.1) With reference to the Pan-Cancer Analysis of Whole Genomes (PCAWG),
consider the following statements:
1. This is the largest genome study ever of primary cancer.
2. One in 10 Indians will develop cancer during their lifetime, and one in 15
Indians will die of cancer, according to a recent World Health Organization
Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
Q.1) Describe the market study highlights about the e-commerce sector in