Modi may not kill e- biz
Centre doesn’t want to act against e- commerce sector
A pro- reform Modi regime is averse to take any action which will impact the existence of nascent e- commerce in the country, according to top government sources.
This despite a recent statement made by minister of state for finance and commerce and industry Nirmala Sitharaman that the government will look into the complaints against the e- commerce companies in the country.
A recent sale announced by e- commerce companies such as Flipkart, Amazon and Snapdeal during the festival season has unnerved the small traders and retailers, who have alleged that the e- commerce portals are involved in predatory pricing. There has also been demands to look into the funding of these online shopping websites.
“We are not in favour of any ban on the e- commerce sites or any regulation which hampers their business. We have to come to terms with the modern technology,” said a government source.
He said that whether sale is happening through retail shops or on- line portals doesn’t matter. “What matters is that business activity is happening whether it is online or offline. Money is coming into the market. People are buying, which inturn boosts manufacturing and related activity,” he said.
“If someone is offering discount and if this prompts people to spend, it means a stimulus to the business activity in the country which is needed at this time to re- start the investment cycle,” added the official.
He blamed the notices to some online portals by some regulators as a result of “old mind set.”
The Flipkart’s ‘ Big Billion Day’ sale, where steep discounts were offered on across products, has raised hackles among small traders and retailers, who claim that such discounts affect their businesses.
However, such discount campaigns are offered globally by ecommerce companies.
In November 2013 China e- commerce giant Alibaba’s Singles’ Day ( local Valentine day) discount campaign had generated whopping $ 5.75 billion in revenue in 24- hours.
In contrast Flipkart’s ‘ Big Billion Day’ sale clocked just $ 100 million in gross merchandise value ( GMV) in first 10 hours.
Meanwhile, small traders are threatening to hold countrywide protests demanding regulations for online retail on October 31.
“The absence of any law, acts, rules and regulations for the online retail has created an uneven level playing field in retail trade. The offline markets have become merely a showcase where customers are visiting just to touch and feel the products and later buying the same products from online market because of significant low price at online portals. This tendency has badly affected the business of offline market,” said small traders and wholesalers association Confederation of All India Traders ( CAIT) on Sunday.
The association will hold protests in Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Nagpur, Calicut, Raipur, Rourkela, Ranchi, Jamshedpur, Jaipur, Chandigarh, Bhopal, Ahmadabad, Kanpur and Dehradun.
“The unrealistic prices, unfair competition, unhealthy business practices, predatory pricing have damaged the business of offline market to the tune of 50 per cent in various segments and Diwali festival season has no meaning this time for offline retailers,” it said.