E-com biggies continue sales

CAIT to move court if online firms carry on discounts flouting FDI rules

Seventy per cent discount on home appliances, 50 per cent cashback on a new mobile phone, countless offers on fashion and home decor — nothing much seems to have changed two weeks after the new foreign direct investment (FDI) rules in e-commerce were enforced.

Flipkart, its subsidiaries Jabong and Myntra, as well as Amazon India had said they restructured their business in India to become compliant to the new rules. According to the new norms these platforms cannot influence pricing to increase sales.

But companies such as Flipkart, Jabong, and Myntra are having week-long Valentines’ Day sales, offering discounts of as much as 80 per cent. Amazon India is also offering discounts of almost 40 per cent.

“Online firms are still holding sales. We have to slash prices to compete with the bigger sellers. If the idea of the new rules in FDI in ecommerce was to finish predatory pricing, it has not worked at all,” said a seller on Flipkart as well as Amazon India on the condition of anonymity.

No powers to book, DPIIT awaits e-com policy

The Department for Promotion of Industry and Internal Trade (DPIIT) has already set up a committee looking into various e-commerce portals. At the moment, the agency does not have any penal powers to book e-commerce portals for violations. DPIIT hopes that the much-awaited ecommerce policy would solve this problem.

“We have been monitoring these companies and have seen them flouting rules around predatory pricing. We believe that in the upcoming e-commerce policy we will have provisions to book and fine them for such violations,” said a senior official

at DPIIT.

However, online players maintain that they are not the ones fuelling discounts.

“We are fully compliant with all regulations governing e-commerce marketplaces, including product pricing and discounts. At Flipkart, pricing and discounting is decided by sellers, with Flipkart serving as a platform for connecting lakhs of sellers and customers. We are committed to ensure that sellers continue to access the consumers across the country efficiently and in a cost-effective way,” said a Flipkart group spokesperson.

Trader organisations such as Confederation of All India Traders (CAIT) said they were tracking the sales on these platforms. "Despite having a policy in place, they are continuing with sales. We will wait for another week and then approach the commerce ministry, if that does not work then we would go to the courts,” said Praveen Khandelwal, secretary general, CAIT.