In 2025, e-commerce giants like Amazon and Flipkart are expected to face intensified regulatory oversight as the government strengthens measures to safeguard competition and protect consumer data.
Key legislative changes, including the implementation of the Digital Personal Data Protection (DPDP) Act and the upcoming Digital Competition Bill, are set to reshape the operational landscape for these companies.
The Competition Commission of India (CCI) is already investigating Amazon and Flipkart over allegations related to favouring select sellers on their platforms. The Enforcement Directorate (ED) sometime back conducted raids across 19 locations, on reports that these companies maintain prohibited control over seller inventories. Regulations mandate e-commerce platforms to function solely as marketplaces, without directly holding inventory.
Pricing practices have also come under scrutiny. Commerce and industry miniser, Piyush Goyal criticised Amazon’s significant financial losses, suggesting they may be indicative of predatory pricing tactics designed to stifle competition.
Once implemented after the rules are notified, the DPDP Act will enforce stringent rules on the collection, use, and safeguarding of consumer data. E-commerce platforms will be required to collect only the data essential for their services, clearly communicate the purpose of data collection, and can keep them only till the time period indicated by the users.
A report by PwC highlights the challenges these regulations pose for e-commerce firms, which currently handle vast amounts of sensitive consumer information, including transaction histories and personal data. Companies will need to overhaul their systems, processes, and technologies to ensure compliance.
The proposed Digital Competition Bill aims to curb monopolistic practices in the digital economy. It introduces the concept of systematically significant digital enterprises (SSDEs), targeting large platforms that meet specified financial and user thresholds.
These designated entities will be required to uphold fair dealing practices, prohibit self-referencing, and avoid anti-steering tactics. The CCI will serve as the primary regulatory body for enforcing these provisions.
Apart from regulatory challenges, e-commerce giants are likely to face heightened competition from quick commerce players such as Blinkit (Zomato), Swiggy’s Instamart, and Zepto.
In response, both Amazon and Flipkart have begun piloting their quick commerce ventures in Bengaluru, signaling their intent to capture a share of this fast-growing segment.
Artificial Intelligence (AI) is expected to redefine e-commerce operations, enhancing personalisation and customer engagement. Flipkart has already introduced a virtual assistant named Flippi, while Amazon India’s conversational assistant Rufus is making strides. However, industry experts emphasise the need for further advancements in AI tools to meet rising consumer expectations for seamless, personalised shopping experiences.
As e-commerce platforms brace for intensified regulatory scrutiny and evolving market dynamics, their ability to adapt will determine their success. Enhanced compliance frameworks, robust data protection measures, and innovative technologies will be crucial for navigating the challenges ahead and sustaining growth in the competitive market.