Page 32 - 30NOV2019E

e- commerce
Retail details: Ecommerce
fails traditional businesses
E-commerce majors may feel the heat from traditional retailers now as the latter launch a
nationwide movement to protest against online giants such as Amazon and Flipkart,
reports tehelka bureau
ur Special Story in
Tehelka in the previous
issue was about e-com-
merce outlets pushing big
O retailers to bankruptcy
with top brands announcing closure
of stores. Now days after the story,
the traders body CAIT has threat -
ened to launch a nationwide move-
ment to protest against e-commerce
majors Amazon and Flipkart, alleging
they are flouting FDI Policy norms and
destroying retail business. The Confed-
eration of All India Traders said that a
memorandum would be submitted to
MPS and “dharnas” would be organized
in 200 cities.
It is learnt that the Competition
Commission of India (CCI) is planning
a policy advisory for the e-commerce
industry to come out with solutions
over concerns over deep discounting
and predatory pricing across online
platforms. The CCI would issue a soft
policy advisory in this regard shortly.
CCI Chairperson Ashok Gupta
agreed that, “nobody can deny that We continue to engage
online is here to stay” but added that e- with the government
commerce industry has to address all
concerns being raised by retail sector and have emphasised
in India. how we have
Praveen Khandelwal, secretary-gen-
eral, Confederation of All India Trad- consistently worked
ers (CAIT) observed that “Policy is the closely with local
domain of every country and if multi-
national corporations wish to carry on kirana stores and other
business, they are under obligation to small businesses in
follow the policy in letter and spirit”.
Khandelwal said that “Customers are the last six years, says
going online because of the unbeliev- Amazon spokesperson
able discounts. Because of this sales at
32
offline businesses are down 30 per cent
to 40 per cent this month.”
Of late, there have been complaints
galore about deep discounting and
offline traders are up in arms against
the e-commerce companies and
the government demanding a
“level playing field”. A policy is like-
ly to be decided in next couple of
months with e-commerce play -
ers insisting that more foreign
investment must come in and business
environment improved. The prospec-
tive policy would limit the maximum
discount on a product and give detailed
break-ups of the discount in the pricing
details, to ensure e-commerce portals
are not the ones financing it.
The CAIT has been pressing hard
and the government has made it clear
that it wants to ensure offline retailers
are not rooted out by major e-com -
merce firms. Online marketplaces, on
their part, have always maintained that
they were following all the guidelines
around discounting and that it is the
seller offering the discounts. Offline
traders or traditional traders want the
policy framework in place with a clar-
ity on the issue of deep discounting
pricing.
E-commerce companies offer deep
discounts particularly before the on-
set of festival season. Recently before
Diwali and other festivals, the online
companies launched their heavy sales
and offered unheard of discounts. On
their part, the e-commerce platforms
have been claiming that deep discounts
are offered by the sellers only. They are
at pains to explain that e-marketplaces principle and that marketplaces should
themselves have not directly or indi- The traditional not have any of its own or related party
rectly influenced them on the matter. retailers and trader sellers on the platform. Also about 94
The traditional retailers and trader per cent felt that sellers controlled
bodies like CAIT allege that online com- bodies such as CAIT by the marketplace hurt the business
panies come out with mega sales under allege that online of independent sellers on the platform.
their names and not in the name of dif- About 90 per cent respondents said
ferent selling brands. It is learnt that the companies come out private labels by marketplaces create a
government is looking into whether conflict of interest for the marketplace
hefty discounts offered on Walmart- with mega sales under and that marketplaces should not be
owned Flipkart and Amazon.com dur- their names and not in allowed to sell their private labels on
ing their online festive sales violate their platform.”
foreign investment rules. The govern- the name of different Survey done by TECI, saw participa-
ment was reviewing complaints and selling brands. The tion from 541 respondents who were
evidence filed by the Confederation of selling online for at least 12 months on
All India Traders, a group represent- govt reviews the issue Flipkart, Amazon, Snapdeal, Paytm Mall
ing some 70 million brick-and-mortar and ShopClues. The survey found 89
retailers. All India Traders has now called for a per cent respondents saying “the laws,
The traders’ body CAIT has an - nationwide agitation against Flipkart, rules and responsibilities for online
nounced a series of actions and pro- Amazon and other ecommerce com- sales should have parity with those for
tests this month to get the govern - panies to continue its months-long offline sales”.
ment’s attention. It had earlier written protests. While the survey obliquely supports
to the Prime Minister urging him to Actually, the major issue is of neu- the view point of the CAIT, the traders
take action against ecommerce dis- trality because online sales directly body has alleged that both Flipkart and
counts. It is learnt that farmers, hawk- affect the profitability of traditional Amazon are flouting the government’s
ers, small industries and self entre- sellers and the e-commerce creates foreign direct investment (FDI) policy
preneurs will be asked to join the a sort of “conflict of interest.” A survey rules and destroying the country’s retail
movement. Reports suggest that after by The E-Commerce Council of India business through predatory pricing and
taking ecommerce companies to me- (TECI) found that 89 per cent of the deep discounting.
diatory meetings, courtrooms, and respondents felt that neutrality of the
the government, the Confederation of marketplace was important as a core letters@tehelka.com
33