Not Just E-Commerce Giants, CAIT Now Blames Brands, Banks of Unfair Practices
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A week after sending a letter to finance minister Nirmala Sitharaman, the Confederation of All India Traders (CAIT) is back knocking at the doors of Piyush Goyal. The CAIT sent a letter to Sitharaman last week, asking her to address the concerns around deep discounting and potential tax avoidance by e-commerce giants such as Flipkart and Amazon..
The letter follows the commerce minister’s statement at an awards event on Saturday, where he reportedly said that e-commerce companies must strictly follow the stipulated laws, so as to ensure that small retailers are not affected.
CAIT has been involved in a months-long tiff with the e-commerce giants, where it demands a resolution to predatory pricing prices, which is taking business away from small, offline retailers. The traders’ body has now extended its complaint to include banks and brands as well, with its latest letter asking for thorough investigation against what it called an “unholy cartel”.
“A comprehensive investigation is needed against this nexus of three,” reads the letter from Praveen Khandelwal, secretary general at CAIT.
In an e-mailed response to Entrepreneur India, a spokesperson for Amazon said the company had a high bar for compliance and that it complies with all applicable laws.
"Amazon.in is a third party marketplace where sellers offer their products to customers for sale. Sellers on amazon.in have the absolute discretion to decide what products to sell and at what prices," the spokesperson said.
A Flipkart spokesperson said the company operated through a marketplace model in India and is fully compliant with all the laws of the country, including all FDI regulations.
Brands and Banks
The traders’ body claims that several brands in the country are selling their products to e-commerce companies at much lower prices than what they offer in the offline market, while also making certain products exclusive to online retail.
Brands participating in such practices are helping the predatory pricing strategies of e-commerce companies, the letter says.
For the banks, CAIT said some of the financial institutions offer cashbacks and other incentives to those shopping online with their credit or debit cards. These offers are exclusive to online retail, with no such facility extended to the offline market. The letter claims that such practices are against provisions of the competition law and the central bank’s policies.
‘Not Against E-Commerce’
The letter, written on behalf of 7 crore traders, however, also says that the body is not against e-commerce considering how it is a fast growing mode of business, aimed for the future, but these companies must follow laws and policies, both in letter and in spirit.
It states that such unfair practices have led to declines for small businesses over the last year.
“Either they should follow the policy or wind up their business activities from India,” it says.