It seems like the Indian government isn’t going to give any leeway to leading e-commerce marketplaces Flipkart and Amazon over alleged violation of FDI laws and rules mentioned in Press Note 2.
After Commerce Minister Piyush Goyal and CCI chairman AK Gupta assurance of action against any such violations, now the Department of Industrial Policy & Promotion (DPIIT) has swung into action and asked them to reveal the names of their top five sellers, price list of goods of preferred vendors and the kind of support provided to sellers.
DPIIT has asked them to disclose their capital structure, business model and inventory management system along with share details about their association with payment gateways, outlined a PTI report citing undisclosed sources.
Through a detailed questionnaire, DPIIT asked Flipkart and Amazon about their total number of sellers listed on their platform. It also asked them to furnish list and share of controlled and uncontrolled sellers along with distributor and retailer price list for preferred/controlled vendors. The duo also has to give a proportion of total sales from the top five vendors.
For the past few months, several complaints against Flipkart and Amazon have been escalating over predatory pricing and controlling the market with their own model of discount and offers.
Apart from small sellers, both firms have been targeted by several traders, sellers as well as retailers association including CAIT and AIMRA over flouting government rule for a marketplace entity.
While CAIT did not comment on the latest clampdown on Flipkart and Amazon, the firm has been leaving no stone unturned to safeguard the interest of sellers and traders and bring a level playing field in the business.
CAIT, which represents over 500,000 merchants and traders in India, had recently met CCI chairman AK Gupta and appealed him to take stringent action against Flipkart and Amazon for their involvement in illegal and unethical practices.
Flipkart and Amazon have vehemently denied any allegation against them.
Separately, CAIT has alleged that not only the e-commerce companies but even large number of Brand owned companies, particularly in Mobile, FMCG, electronics, electrical appliances, footwear, garments, gift articles, watches and different Banks are also equally responsible for distortion of prices of different products on online portals.
It has strongly criticised different Banks who are giving cash back and discounts for purchasing goods from e commerce portals by making payments through their respective credit/debit cards.
CAIT National President BC Bhartia and Secretary General Praveen Khandelwal have also urged Prime Minister Narendra Modi to constitute a Group of Ministers (GoM) to look into distortions both in e-commerce and brick & mortar format of retail.