Amazon and Flipkart have denied that they are flouting any FDI norms and the deep discounts and predatory pricing that one sees on their platforms are offered by the brands themselves and not by them.
This is the stand they have taken at the meetings that e-commerce companies attended this week with the traders’ body, the Confederation of All India Traders (CAIT). The meetings were called by the Department for Promotion of Industry and Internal Trade (DPIIT). DPIIT called the meetings in response to complaints made by CAIT that both the US giants Walmart (Flipkart) and Amazon are violating FDI rules through predatory pricing and offering deep discounts. The department arranged the meetings separately with Amazon and Flipkart representatives, where CAIT representatives were present.
CAIT has said it was not satisfied with the meetings held with the two e-commerce companies. The Secretary General of CAIT, Praveen Khandelwal said that they had with them, and presented at the meetings, mails written by the e-commerce firms to the various sellers on their platforms to offer higher discounts during the festival sale event and that the losses if any, can be split. Khandelwal says besides these mails they have submitted evidences on predatory pricing, deep discounting, controlling inventory by portals, exclusivity and total violation of FDI policy.
The trade body has said that it will now take it up with the brands to know if this is true and find the reasons for their members not getting the same price concessions. If they don’t receive satisfactory response from the brands, they will haul them to the Competition Commission of India on charges of offering exclusivity and discrimination among the customers.
On their part, Amazon and Flipkart have stated that they don’t wish to violate any rules and regulations. They have even offered to the members of the CAIT to become sellers on their platforms.
The matter may continue to simmer it appears even as the two online retailers, after having clocked sales of Rs 39,000 crore in the 5 days of festive sale are gearing up for one more round around Diwali.