The e-commerce entity (also foreign-owned) is any person who owns, operates or manages a digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity.
Marketplace based model of e -commerce means providing an IT platform by an e-commerce other hands entity on a digital & electronic network to act as a facilitator between buyer and seller. On other hand, Inventory based model of e-commerce means an e-commerce activity where an inventory of goods and services is owned by an e-commerce entity and is sold to the consumers directly. However, FDI is not permitted in an inventory based model of e-commerce marketplace-based
According to guidelines for FDI (Foreign Direct Investment) on E-Commerce, an E-commerce entity providing a marketplace will not exercise ownership or control over the inventory i.e. goods purported to be sold. Such ownership or control over the inventory will render the business into the inventory-based model. Inventory of a vendor will be deemed to be controlled by an e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies.
Source: Vision IAS
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