Amazon and Flipkart may not offer deep discounts – Govt action


The quick answer from any customer for a perfect place for shopping will be Amazon and Flipkart.

So it very clear that the major percentage share is occupied by Amazon and Flipkart.

Having huge capital and base these e-commerce giants will offer the products at very prices which is directly affecting the small retailers.

Moreover, there are lots of products available in Amazon making customers easy to purchase all types of products online without even visiting the nearby store.

Massive discounts can keep these giants in trouble

Everything is fine, but Govt has a serious problem with the pricing offered by the e-commerce giants during the festive season.

During the festive season, India draws a lot of crowds and we can see the major transition from buying products from the retail market to e-commerce.

The two companies have topped up a sales figure of $3 Billion in their festive season which is a massive amount of sales.

Even in the recent survey, more than 75% of people are interested to buy products online compared to the retail markets.

You can get a massive discount which can go up to 70 to 80%.

Action against these companies

Offering major discounts comes under ” Predatory Pricing ” which is not acceptable according to the specified set of rules.

Union Minister Piyush Goyal assured to take action against Amazon and Flipkart if the two companies are found following the practice.

According to the official reports, complete questionnaires are sent to Amazon and Flipkart. So still the complete answers need to be given by the government.

Before that, what type of laws need to be followed by the e-commerce giants

Rules for Foreign companies

Amazon is a US-Based company and coming to Flipkart it is an Indian but now it is also owned by American giant Walmart.

Both these companies follow the Buyer -Seller rule in which they contact sellers to sell the products on their platform instead of selling their own warehouse.

So this is the only type of method which is allowed in India.

Even the latest FDI rules which launched in February, they have stopped special partnering with special companies to sell exclusive products, for example, the OnePlus Amazon Partnership.

Even to acquire the customer, costs have been lowered down even further by offering cashback, waving off the delivery and many others.

Nikhil Narendran, a partner at India-based law firm Trilegal was claimed that ” Deep discounts are not bad as long as they are not harmful to the consumer.”

Competition Commission of India

This commission keeps an eye on the anti-competitive practices in India and this commission had observed e-commerce platforms for indulging in anti-competitive practices.

To eradicate the predatory pricing, CCI is planning to issue a soft policy advisory for the e-commerce industry.

However, there’s much to come out to implement the newer policies.