After Flipkart and Amazon, the government has now written to Snapdeal and Paytm Mall asking to share information on their selling practices. The move is part of a wider probe into deep discounting practices of ecommerce players.
The Department for Promotion of Industry and Internal Trade (DPIIT) has asked both ecommerce platforms for details about top sellers on their platforms and the schemes they offer to vendors.
“We have written to large companies that have foreign direct investment-…we want to see what practices they are following,” a government official told ET. This is part of government’s move to settle traders’ body’s grievances regarding deep discounting and predatory pricing by ecommerce platforms.
In October this year, DPIIT reportedly sought a list of the top five sellers from Amazon and Flipkart. The details asked included business done by the top five sellers, investments and ecommerce platforms’ commission agreements with vendors.
Replying to ET’s query on details sought, Paytm Mall spokesperson said, “The questions are in the nature of the queries as indicated by you. We, however, do not confirm if the list is inclusive of all questions, nor can we confirm that all your stated questions are in the questionnaire from the department.”
Traders’ Body Demands Level Playing Field For All
Traders’ bodies are protesting against ecommerce companies for allegedly shutting shop of small merchants, SMEs across the country. The tiff between traders’ body and online marketplaces have been going on for more than a year now with festival discounting again bringing the matter to the limelight.
A delegation of the CAIT has been meeting minister of commerce and industry, Piyush Goyal, to discuss their grievances regarding ecommerce platforms and their deep discounting methods for almost a year now. During their meetings, they have been reiterating that ecommerce giants have created an unlevel playing field for the retail traders, vendors and brick-and-mortar stores.
The traders’ bodies have also been saying that the online marketplaces are flouting FDI rules by offering deep discounting. They have been demanding corrective action against these platforms for violating FDI rules.
In October 2019, Akhil Bhartiya Udyog Vyapar Mandal, along with local retailers and distributors, locked down the Flipkart’s Kanpur warehouse. The protestors repeated CAIT’s observation that online marketplaces are indulging in unfair means to shrink the business of brick and mortar stores.