E-Commerce and Quick Commerce in India
Marketplace Versus Inventory Models
India's FDI rules allow foreign-owned e-commerce firms to run marketplaces connecting sellers and buyers but not to own and sell inventory.
Legal structure shapes the business.
Marketplace
The platform provides the site and services while independent sellers own the goods.
Inventory
The company itself buys and holds stock, which foreign-owned firms cannot do for consumers under the rules.
Why the rule
Policy aimed to protect small traders from large foreign players.
Workarounds
Firms work with sellers in which they have partial interest, which regulators have questioned.
A local wholesaler lists goods on a marketplace and ships each order through the platform's logistics.
Most are sold by independent sellers.
- Marketplaces host sellers.
- Foreign firms cannot hold inventory for consumers.
- Rules protect small traders.
- Structures are scrutinised.
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