New B2C definition set to determine future of India’s multi-dollar billion e-commerce business

At stake are billions of dollars in venture capital funding that have found their way to online marketplaces. Photo: Freedigitalphotos.net, By Naypong, Image ID: 100187403

India’s industry department will soon define the term marketplace and also elaborate on just what constitutes retail and wholesale trading on such platforms—a move that will decide the future of not just India’s booming e-commerce business and high-profile start-ups, but also that of traditional retailers that have long alleged that many of these marketplaces are actually involved in the retail business.

At stake, apart from an online retail market worth $4.47 billion last year (according to UBS) and estimated to be worth between $48 billion and $60 billion by 2020, are billions of dollars in venture capital funding that have found their way to these marketplaces, defined as websites that connect buyers to sellers, offering services such as warehousing, logistics, and payments. This falls under the definition of so-called B2B or business to business e-commerce. India allows foreign investments in firms engaged in this business, but not in retail firms.

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