With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?

1. They can sell their own goods in addition to offering their platforms as market-places.
2. The degree to which they can own big sellers on their platforms is limited. Select the correct answer using the code given below:

This question is based on the Consumer Protection (E-Commerce) Rules, 2020, and FDI guidelines in e-commerce.

Statement 1 is incorrect: According to the rules, an e-commerce entity is defined as one who owns, operates, or manages a digital platform for e-commerce, excluding sellers on a marketplace entity. This implies they cannot sell their own goods if they are operating a marketplace.

Statement 2 is correct: FDI is not permitted in inventory-based e-commerce. A marketplace entity cannot exercise ownership or control over inventory. Thus, the degree to which they can own big sellers on their platforms is limited.

Hence, only statement 2 is correct.