BIS draft guidelines streamlines advertising standards on e-commerce platforms

The Bureau of Indian Standards (BIS) has released a draft outlining self-governance guidelines for the e-commerce industry. BIS will accept comments from stakeholders until February 15. Interestingly, the draft guidelines address advertising practices on e-commerce platforms and mandating adequate disclosures on e-commerce websites and apps.

The draft, titled “E-Commerce: Principles and Guidelines for Self-Governance,” lays out essential principles and provides guidance for the self-governance of e-commerce operations, aiming to benefit both consumers and other stakeholders involved in the e-commerce business.

According to a recent EY-FICCI report, e-commerce platforms generated advertising revenue of INR 70 billion, accounting for over 14% of total digital advertising (compared to 12% in 2020). This figure is expected to reach INR 150 billion by 2025.

The draft covers various aspects of e-commerce, including information disclosure, product and service information display, returns and refunds, handling counterfeit goods, measures against the sale of banned products, and more.

The guidelines emphasize that every e-commerce entity must ensure the authenticity of all sellers, service providers, and products on their platform. BIS states that consumers engage with these platforms due to the trust they inspire. Additionally, the consumer shopping experience is influenced by the platform’s business partners.

Regarding advertising, the draft states that advertisements or sponsorships must be clearly identifiable as such and distinguished from other content, including editorial comments, terms and conditions, and independent product reviews. It also highlights that product displays must comply with regulations and guidelines such as those from FSSAI, Legal Metrology Rules, and ASCI.

The draft mandates that all disclosures must be provided in a phased manner, ensuring relevant information is available at every stage of the consumer’s decision-making process. Disclosures should be prominently published on the platform, website, or app in a clear, legible, and accessible format.

According to a study by RedSeer Consulting, over 90% of brands in India participate in e-commerce festival season sales. The study also revealed that the average brand allocates over 10% of its annual advertising budget to these sales.

Interestingly, BIS places responsibility on e-commerce platforms to obtain confirmations from sellers, ensuring that product descriptions, images, and other content accurately reflect the appearance, nature, quality, purpose, and features of the specific product or service. Platforms are also required to take appropriate action when discrepancies are brought to their attention.

The draft further requires e-commerce entities to periodically review all sellers and ensure that their representations are authentic and accurate.

Emphasizing the importance of fair representation, the BIS document states that the default digital representation of sellers should be impartial and based on pre-determined parameters, such as reviews and prices.

The document also specifies that platforms must provide a clear explanation of the primary parameters used to rank goods or services. Terms and conditions governing relationships with sellers and any differentiated treatment provided to certain goods, services, or sellers must be transparently disclosed.

As per a report by Mordor Intelligence, India’s e-commerce market size is projected to grow from USD 137.21 billion in 2025 to USD 363.30 billion by 2030, at a compound annual growth rate (CAGR) of 21.5% during the forecast period.

BIS will add formal clauses in future after seeking adequate consultation from the stakeholders.