The shocking news about AIOVA and its impact on the ecommerce ecosystem!
On 22nd September, Economic Times Retail published a news article about AIOVA shutting down its advocacy and activism for sellers. All India Online Vendors Association (AIOVA) is an active forum for sellers and vendors in the Indian Ecommerce Ecosystem that has in the past two years helped various sellers with their problems through discussion, debate, advocacy, legal steps (RTI filing) and social activism. Needless to say such forums in India get little or no support from the Government.
It is also important to note that 2017 has been a year of fundamental changes in Government policies for business owners owing to the implementation of GST, which was preceded by a huge step of demonetization in the same year. Businesses both online & offline struggled to manage cash flow and run the business at a pace where there is sufficient profit margin.
Ecommerce has evolved a lot over the past years in India. Wider reach and convenience of selling anything attracted a lot of young businesses and individuals to foray into becoming full time sellers. But over the period, sellers started feeling the pinch of the rampant ways of how settlements were made, how various kind of complicated charges hurt their pockets, and how frequent changes in the policies left the seller ecosystem completely unaware about profitability, resulting in heavy losses.
Data suggests that in last 5 years over 500,000 sellers registered on various e-tailer portals. However, active sellers doing business (minus #cloudtail #wsretail) are not even 20,000. Where did the remaining 480,000 sellers vanish?
Main reasons for sellers exiting were lack of support, lack of training, lack of knowledge about dealing with marketplaces, lack of control on financial cash flow, ageing stock, liquidation of returned items, and no information visibility tool or software for efficient management.
And since ecommerce sellers have their own battles to fight, the news article quoted âThe only choice for sellers is to go into litigation for each injustice served to them. The cost of litigation will be huge for individual sellers. Government is not interested in bringing regulatory body, nor interested in enforcing current laws like DIPP press note 3/2016. By a law of RBI, marketplaces cannot hold sellersâ payments more than 2 days after collecting the money, and the money needs to be maintained in an escrow until payment is made.â
The founders of DSYH who have worked closely with various marketplace sellers feel, âIt is a sad and disappointing that bodies like AIOVA who stand for the seller’s community have to shut down after fighting so hard, due to lack of cooperation and willingness to clean the mess that is being created but is kept under the carpet. Biggest pain point of the seller fraternity is Reconciliation and Accounting, and this is unequivocally the truth.
AIOVA was the frontrunner when it came to addressing seller grievances to marketplaces and it did a commendable job to raise sellersâ voice to all these players. But after this news, it raises a very pertinent question. Why did they stop advocating and how does this impact the seller ecosystem as AIOVA was the strongest voice calling a Spade a Spade?
With forums like AIOVA shutting down very early losing faith in the Government, and leaving marketplaces alone in the war zone, it is about time to witness how marketplaces continue to onboard new sellers and source unique products through them collecting business intelligence and later deserting them to fight with their own mess (read financial mess) alone.