Changes in e-commerce norms to have marginal impact on hiring, say firms

These norms would hit Amazon and Walmart-backed Flipkart the hardest

The recently announced changes in norms for e-commerce companies with foreign investment may have sent the players into a tizzy, but recruitment firms expect only marginal impact on hiring in the sector in the near future.

According to GlobalHunt Managing Director Sunil Goel, there could be a "marginal 5-10 per cent" impact in the near future, but hiring is expected to continue.

"The impact of changes in the policy would not be that large in the sector... supply chain and customer service will remain crucial functions wherein hiring shall continue to happen to meet the consistently growing demand of the consumers, he told PTI.

In December, the government introduced new regulations that would bar online marketplaces with foreign investments from selling products of the companies where they hold stakes, and ban exclusive marketing arrangements.

Another provision states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 per cent of the vendor's purchases are from the marketplace entity, including the latter's wholesale unit.

These norms -- which are effective February 1 -- would hit Amazon and Walmart-backed Flipkart the hardest. These two e-commerce platforms are also the largest in the country.

"We believe that the policy, while being detrimental to the current business models of the existing players, will not adversely impact jobs in the sector. The large players have committed significant investments into the country and are looking at India as a growth market," said Paul Dupuis, managing director and chief executive officer of Randstad India.

He added that there might be a slowdown in growth but not a reduction in headcount should the policy go into force as-is.

"Should the large e-commerce players put expansion plans on hold as a direct consequence of the new policy going into force, we believe that the opportunity loss for the number of new supply chain-related roles might be to the tune of 50,000 - includes warehousing, transportation and last mile roles for the entire ecosystem over the next 12 months which should come back once operations adjust to the new normal," he said.

However, a senior e-commerce executive with one of the large e-commerce players warned that as four to five lakh jobs could get impacted across areas such as logistics, warehousing and seller manufacturing ecosystem as these norms could affect operations of e-tailers. The representative did not wish to be identified as the matter is sensitive.

Overall, the changes to the e-commerce norms have drawn a mixed reaction. While Flipkart had suggested that government should follow a consultative process in framing rules that have long-term implications, Amazon had said it has "always operated in compliance with the laws of the land" and is evaluating the new guidelines "to engage as necessary with the government to gain clarity".

Smaller players such as ShopClues and Snapdeal had, however, welcomed the move saying the development will "close the back door" that has been "blatantly exploited" by larger companies and provide a level-playing field for all.