Changing Laws of Digital India

Digital disruptors such as Airbnb and Flipkart face legal obstacles in India as these 2 news reports show.

Times of India reports that home-sharing platform Airbnb has positioned India as one of the fastest growing markets with over half a million users since last year. Co-founder Nathan Blecharczyk on his visit to the country is expecting the government to introduce progressive rules to encourage home sharing. "In April, the Indian tourism ministry indicated it would be reviewing the current laws and regulations in regards to home sharing to make it easier for people to have the chance to experience Indian hospitality," according to a statement.

Times of India also reports that facing the prospect of funds drying up, leading online marketplaces Flipkart and Snapdeal have asked their top brands to run advertising and marketing campaigns for them to promote deals and products, demanding the same treatment as large brick-and-mortar chains. While some brands are wary about a backlash from offline retailers, others are amenable to the idea, viewing it as support for an additional sales channel. The strategy will enable e-commerce companies to comply with rules that bar them from predatory pricing, which implies they cannot promote them either, four industry executives said.

"Brands are at liberty to discount products and hence any such deals and marketing campaigns done by them will not violate the rules," said the head of a leading domestic consumer electronics maker. He said a squeeze on marketing budgets had accelerated such efforts. Until recently, e-commerce companies ran all advertising campaigns to drive sales, except those for exclusively online products, which were mostly joint spending. With investors tightening their belts and scrutinising marketing spends, e-commerce firms have been compelled to approach the big sellers, the officials said.


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