What is Flash Sale for e-commerce?

When an e-commerce entity offers significant discounts or promotions on products for a very short period of time, it is known as a flash sale. Brands attract potential customers via e-mails, social media campaigns, push notifications, and SMS. The content used for this purpose enables the shoppers to immediately find out the amount of discount. 

Aim of flash sale:

The main aim of the flash sale is to get customers to impulse buy, increase short-term sales and sell surplus stocks. 

Benefits of flash sale:

1- It helps the businesses get new customers and increase short-term sales.

2- Substantial discounts for a predetermined time encourages people to make quick purchase decisions. 

3- It also improves brand visibility as shoppers who consequently become customers share the news of attractive offers provided by a business to their friends and colleagues. 

4- They market items that are not in demand or sell surplus stocks.

Differences between Social Commerce and E-commerce (Electronic Commerce)

Why in news?

In a bid to curb widespread cheating and unfair trade practices in the e-commerce ecosystem, the Ministry of Consumer Affairs, Food and Public Distribution has proposed sweeping changes to the Consumer Protection (E-Commerce) Rules, 2020. These include new registration of online retailers with DPIIT, a ban on specific flash sales, and sharing of information with government agencies.

The draft inviting public comments till 6 July 2021 has been put up on the website of the Ministry of Consumer Affairs. 

Will all 'flash sales' be banned in India?

No, all 'flash sales' would not be banned in India. Only predatory sales will be banned once the proposed changes come into force. 

As per a statement by the Ministry of Consumer Affairs, Food and Public Distribution, "Conventional flash sales by third-party sellers are not banned on the e-commerce platform. But certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller on a platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back' order with another seller controlled by the platform. This prevents a level playing field and ultimately limits customer choice and increases prices."

Highlights of the proposed changes:

1- The Ministry has directed the e-commerce entities on the lines of IT intermediary rules to appoint a Chief Compliance Officer, a nodal contact person for 24x7 coordination with law enforcement agencies, and Resident Grievance Officer, to ensure effective compliance with the provisions of the Act and to strengthen the grievance redressal mechanism. 

2- Every e-commerce entity that intends to operate in India has to register itself with the Department for Promotion of Industry and Internal Trade (DPIIT) within the prescribed period by the DPIIT for allotment of a registration number.

3- Ban on display and promotion of misleading advertisements. Also, e-commerce entities offering imported goods will have to provide details of the importers along with the country of origin.

4- Display ‘best before or use before date’ of a product to enable consumers to make an informed purchase decision.

5-  No logistics service provider of any e-commerce entity shall provide differentiated treatment between sellers of the same category.

6- E-commerce entities should provide information within 72 hours of receiving an order from a government agency.

"The new draft is a guiding stone to purify the e-commerce landscape of the country, which has been greatly vitiated by various e-commerce global companies…," the Confederation of All India Traders said in a statement, who have been opposing practises by major e-commerce firms like Amazon and Flipkart.

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