E-comm firms killing offline sellers using predatory pricing and exclusivity: AIMRA

The online festive shopping season has arrived. So are the issues of predatory pricing, exclusivity and discounts. In the latest complaint against online e-tailers, the All India Mobile Retailers Association (AIMRA), which represents thousands of offline mobile sellers in India, has requested the govt to take strong step to curb these practices that may kill offline businesses.

The predatory pricing and exclusivity by online platforms have damaged the ecosystem of the trade beyond repair. This has led to shut down of over 30K mobile phone retail outlet in last one year, AIMRA said in a letter sent to the commerce ministry, the Competition Commission of India  (CCI) and the Department for Promotion of Industry & Internal Trade (DPIIT).

It further asked to create a level playing field with priority on the same product, same time and same price.

This is not the first complaint on predatory pricing and discount offered by e-tailers. Over the years, offline sellers have complained of these practices being exercised by deep-pocketed e-commerce firms.

Last year, the govt had released FDI rules for the e-comm firms. The draft barred online marketplaces from signing exclusive deals for products on their platforms and also directed that a single vendor could sell a maximum of 25% of its inventory on an e-commerce platform.

Despite FDI rules, offline sellers still alleged that the predatory pricing and exclusivity is still on.

Online retailers are given new models first and only after the sales start dwindling, they get released to offline retailers, said AIMRA president Arvinder Khurana.

The issue gets magnified during the festive season.

Every year, e-commerce players host exclusive sales by offering quality products at discounted prices. With smartphone and internet growing penetration, it reaches customers fast and takes away a large chunk of customers before offline retailers even begin to offer discounts to customers.

There are unregistered retailers, who resort to buying online-exclusive models in bulk, at discounted rates, during the festive period, added Khurana.

This year, as per market research firm Forrester report, around 80% of sales will take place in the first five days of the festive season. The sales estimate is predicted to be $3.82 billion, 32% more than last year figure.

AIMRA further requested the govt to curb the practice of smartphone makers giving exclusive models to e-comm platforms. If the govt fails to do this then it will result in death of domestic trade and job loss, added the letter.