New Delhi: The Swadeshi Jagran Manch, an RSS affiliate, and the Confederation of All India Traders Association (CAIT) have decided to meet Prime Minister Narendra Modi, Finance Minister Nirmala Sitharaman and Commerce Minister Piyush Goyal over alleged predatory pricing by e-commerce giants Flipkart and Amazon.
The CAIT has also demanded that the Modi government probe banks that are promoting cash-back offers on these online platforms.
The two organisations said they have decided to act as they fear that traders will be affected by the “unethical business practices” of the e-commerce giants this Diwali. CAIT president B.C. Bhartia told ThePrint that retail trade in India generates a yearly business of about Rs 45 lakh crore, of which trade of about Rs 6 lakh crore occurs just during the Diwali festive season.
He added that in the hope of doing good business this festive season, traders have stocked up but fear their prospects will be affected by online discounts. Bhartia further said that traders affiliated to both bodies will not decorate markets this Diwali as a mark of protest.
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CAIT wants GoM to probe predatory pricing
Praveen Khandelwal, secretary general, CAIT, told ThePrint that the bodies want the Modi government to constitute a group of ministers (GoM) to look into the issue of predatory pricing, not only with Flipkart and Amazon but a large number of other companies.
“These companies owning brands and banks are operating in close nexus and distorting prices,” Khandelwal said. “They are offering different prices at normal retail stores and different rates on e-commerce portals. This is a violation of the competition act.”
Khandelwal further said that markets have already suffered about 30 per cent of business, as compared to last year, due to the online mediums.
“Due to unscrupulous business practices of online companies, there is a decline of about 60 per cent in the mobile sector, 35 per cent in the FMCG and consumer durables, 35 per cent in electronics goods, 30 per cent in electrical appliances, 25 per cent in apparel, 20 per cent in footwear, 35 per cent in gift items, 25 per cent in furnishing goods, 25 per cent in decorative items, 15 per cent in building hardware and 30 per cent in kitchen equipment,” he said.
He added that there have been losses of 30 per cent in the computer goods sector, 35 per cent in grocery, 20 per cent in watches, 30 per cent in beauty and cosmetics, among others.
“If the market goes on like this for another week, then this Diwali, there will be a drop of about 50 to 60 per cent in the total business of traders,” he said. “This is quite alarming.”
Khandelwal said that there are about 7 crore small businesses in the country that provide employment to about 45 crore people.
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Notices sent to Flipkart and Amazon
On pressure from CAIT and the manch, the Department of Promotion of Industry and Internal Trade (DPIIT), which falls under the commerce ministry, has asked Amazon and Flipkart to provide details of their capital structure, business model and inventory management systems. The DPIIT has sent two questionnaires directing these companies to share their GST compliance and details of their payment getaway commission contracts.
Last week, Commerce Minister Piyush Goyal said the government will take tough action if the companies are found guilty of violating the country’s e-commerce policy.
“We have made it clear that if anybody tries to use the route of multi-brand retail, then strict action will be taken,” Goyal had said in Mumbai. “E-commerce is a marketplace platform. E-commerce companies have no right to discount their products. They have no right to harm small retailers by using the method of predatory pricing.”
Swadeshi Jagran Manch national co-convener Ashwini Mahajan called for a ban on these companies if they don’t reply to the ministry’s concern and roll back their predatory pricing norms.
He added that they had sent letters to 200 prominent brands asking them to clarify whether they were offering huge discounts on Amazon and Flipkart.
“We have received no communication from these companies,” he said. “We have also sought time with RBI governor Shaktikanta Das to apprise him of banks’ nexus with these platforms.”
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When people 3njoyed free calls given by jio and overlooked the destruction of telecom industry, then why they be bothered when small traders are shunted out of business by eCommerce giants.
For the customers jio and Amazon are on the same platform. Why RSS weeps now.
When jio comes it was also affected the market now you people are trying to make nonsense rules and impotent govt always killing common man wish every time.
The retail markets are getting a hit as a result of this predatory pricing by these e commerce companies which in turn is affecting the retail business being shut down and creating unemployment.
There is already significant unemployment and this will further add to that. The overall retail business and employment scenarios will go from bad to worse.
The government needs to intervene and end this predatory policy of these e commerce companies
What has danda jhanda got to do with Amazon or retail? Guess it is a mullah talking about St.Peter.
Retail in India is failing and no industry is spared from these. if government does not take any immediate actions to save retail then our economy is going towards a big big slow down as every small businesses will collapse either because of direct hit from the online sale of from indirect hit. Retail also drives real estate and all those infrastructure will face big turmoil if retail fails. Just think of the impact it will have on the industry around you.