Bangalore: Amazon.com Inc. Chief Executive Officer Jeff Bezos is facing a bitter welcome during his India visit this week as the country’s antitrust regulator initiated a formal investigation just hours before his arrival and trade bodies comprising millions of infuriated small store owners announced demonstrations.
Bezos is in New Delhi for the Smbhav summit, an Amazon India gathering for small and medium businesses. The billionaire is scheduled to conduct a fireside chat with Amazon India chief Amit Agarwal, anchoring an event that also features Infosys Ltd. co-founder Narayana Murthy and retail billionaire Kishore Biyani, who recently sold a stake in his retail group to Amazon. Ahead of the event, Bezos paid his respects at Mahatma Gandhi’s memorial, wearing a white tunic and a rust-colored Indian vest.
The small businesses that Amazon’s CEO is hoping to endear himself to, however, are organizing in opposition. The Confederation of All India Traders announced that members of its affiliate bodies across the country would stage sit-ins and public rallies in 300 cities to raise a war cry against the world’s largest online retailer.
In a letter to Prime Minister Narendra Modi last week, the confederation’s Secretary General Praveen Khandelwal alleged that Amazon, much like Walmart Inc.-owned Flipkart, was an “economic terrorist” who engaged in predatory pricing that deprived the government of tax revenue and “compelled the closure of thousands of small traders.”
Priyadarshini Durairaj, digital marketing officer at Chennai-based Naga Ltd., said she was at Smbhav with an open mind. “Brands like ours,” she said of Naga, which makes and sells pasta on Amazon and other online and offline outlets, “need to understand platforms’ plans and offerings for sellers like us.”
India’s e-commerce market is projected to grow to $150 billion by 2022, according to a 2018 report by software industry group Nasscom and consulting firm PwC India. Competition for this rapidly expanding sector is intensifying as Asia’s richest man, Mukesh Ambani, prepares to go live with JioMart, an online shopping platform challenging Amazon and Walmart directly. The latter’s Flipkart Online Services Pvt is also delving deeper into the countryside in its pursuit for more customers. Amazon, for its part, opened a huge office complex in the southern city of Hyderabad in September, underscoring its commitment to the country.
The Competition Commission of India said it would probe the deep discounts, preferential listings and exclusionary tactics that Amazon and Flipkart are alleged to have used as anti-competitive levers. India’s trader bodies have long argued that both retail giants were flouting rules by promoting sales and discounts through their favored sellers, many of whom they have preexisting commercial arrangements with. The regulator has ordered for the investigation to be completed within two months.
“India needs to address the traders’ protests in a responsible manner,” said Durairaj, “They cannot counter deep discount models.”
Bezos last visited India in 2014 under starkly different circumstances. During that trip, the Amazon founder wore local festive garb, rode atop a festooned truck for a photo opp and presented Amazon’s Indian unit with a giant check for $2 billion. Since then, Amazon has pledged a further $3.5 billion to expand in the country.
Just landed in India and spent a beautiful afternoon paying my respects to someone who truly changed the world. “Live as if you were to die tomorrow. Learn as if you were to live forever." – Mahatma Gandhi. pic.twitter.com/xDXAT9cBgf
— Jeff Bezos (@JeffBezos) January 14, 2020
Also read: Trade regulator CCI orders inquiry into Amazon, Flipkart for alleged malpractice