Local retailers lockdown Flipkart's zonal warehouse in Kanpur

E-commerce marketplaces such as Amazon and Flipkart have been facing the heat from brick and mortar stores recently. Trader body associations such a Confederation of All India Traders (CAIT) and All India Online Vendors Association(AIOVA) and others have been continuously raising the issue of deep discounting, predatory pricing and exclusive deals. 

Adding to the protests, local leaders of Akhil Bhartiya Udyog Vyapar Mandal along with local retailers and distributors locked the biggest zonal godown of Flipkart in Kanpur yesterday. 

The protestors sat outside with banners and did not allow normal functioning of business throughout the day and further claimed to march to Delhi if their demands are not heard. 

They alleged that online marketplaces are employing unfair means to kill the business of physical stores. The political outfit claimed that physical stores which make up as much as 30% of their annual sales during the festive season were damped by the deep discounting of products by Amazon and Flipkart during their respective festive sales. 

As per a CAIT estimate, both companies have sold goods worth Rs 19,000 crores in just four days, which makes it clear that a large part of the business of brick & mortar shops has already been shifted to online portals.

There is a decline of about 60% in the business of mobile sector only, 35% in FMCG, consumer durables and in electronics goods each, 30% in electrical appliances as per CAIT’s secretary general Praveen Khandelwal. 

Protest by traders bodies against Flipkart and Amazon is gaining quick grounds across the country. Lockdown of godown in Kanpur by like Akhil Bhartiya Udyog Vyapar Mandal is indeed a bizarre incident. But the incidents show that brick & mortar retailers are prepared to fight tooth and nail against the e-commerce marketplaces.

The government had also taken the cognizance of concerns of traders bodies and small retailers. Commerce Ministry recently asked Flipkart and Amazon to furnish details of the top five sellers, business models and capital structure among others.