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E-commerce majors stoke discount controversy

Update On :10 August 2016

E-commerce majors stoke discount controversy

According to FDI rules, Retailer bodies to demand govt action against I-Day sales offers. Premium jacket advertisements in newspapers, constant pop-ups on computer monitors and a stream of notifications on mobile phones.Amazon, Snapdeal and Flipkart, the three big e-commerce companies, have again with their Independence Day sales started a discounting war.

While the online sales could continue through the upcoming festivals and stretching to the new year, trader bodies plan to complain to the department of industry policy and promotion (DIPP) that these companies are flouting the foreign direct investment (FDI) norms.However till there's any government crackdown, the portals are outdoing each other in gaining traction and customer stickiness.

Irked by these massive sales and alleging gross violation of FDI norms, which clearly state online entities cannot influence pricing in any way, trade bodies are planning to approach the government on this issue on Wednesday.

Praveen Khandelwal, secretary general, Confederation of All India Traders, said: "They are openly flouting DIPP guidelines. We have asked our legal team to prepare a complaint, which we will submit tomorrow. They are supposed to be technology providers but are they not influencing price with these full-page advertisements? If DIPP does not do anything, we will start a long-drawn legal battle with these firms."

"Nowhere in these advertisements does it give the name of the sellers who are giving discounts. The government knows what is happening and sooner or later, these companies will be investigated. If they are flouting rules, the Enforcement Directorate or the Economic Offences Wing should look into it," said Kumar Rajagopalan, chief executive, Retailers Association of India.

"Sellers are being forced to toe these marketplaces' line and offer discountd. Or suffer with no visibility. The sellers who are getting visibility are paying through their noses," said a spokesperson of All India Vendors Association.

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