Economy

Small traders, retailers protest against foreign e-commerce platforms at Asmbhav Summit

Our Bureau Bengaluru | Updated on April 15, 2021

Call for stricter regulations, central agencies-led investigation

 

Local traders, small sellers, retailers and SMBs got together to organise a day-long virtual summit Asmbhav (meaning impossible) on Thursday to coincide with Amazon India’s second edition of Smbhav, its summit for sellers, in order to protest against the “real agenda of foreign retailers posing as marketplaces,” by circumventing Indian laws.

Asmbhav Summit was organised by PRAHAR (public response against helplessness and action for redressal), AIOVA (All India Online Vendors Association, AICPDF ( All India Consumers Products Distributors Federation), AIMRA (All India Mobile Retailers Association), FAIDA (Federation of All India Distributors Associations) and FDTA (FMCG Distributor and Traders Association). These associations collectively represent over 6 lakh small sellers. The event saw small traders share the challenges they face while selling on e-commerce marketplaces run by MNC players and expects to create awareness around policy loopholes which they claim are being exploited by these e-commerce firms.

 

A key point that emerged was the need for stricter regulation and penalisation for wrongdoing by foreign retailers which are posing as marketplaces. “Some government agencies have now become active and vigilant. ED is one while the Competition Commission of India (CCI) is also investigating and has gone to court too. My request is for the RBI to investigate FEMA violations wherever these have taken place so that the foreign platforms, if they are defaulters, can be checked and stopped,” said Ashwani Mahajan from Swadeshi Jagran Manch.

Competition law violation

According to Pranav Sachdeva, Advocate on Record, Supreme Court, the focus should not rest on FDI law since these e-commerce giants do not technically violate this. “We must focus on competition law being violated and create a policy that stops retailers above a certain size from becoming sellers,” he said.

Just as Amazon gives out Smbhav awards, Asmbhav awards were given symbolically to NR Narayanamurthy, founder of Infosys, Jeff Bezos, founder CEO of Amazon, and Amit Agarwal, country head, Amazon India, for the “dubious distinction of making the possible impossible for small Indian online and offline retailers,” Abhay Raj Mishra, President, PRAHAR, told BusinessLine.

Some of the top concerns articulated at the summit were: Foreign retailers misleading the government by showing a large number of sellers on their platforms when in reality only5-6 sellers account for 95 percent revenue. Misuse of data and sales trends related information of small sellers to gain insights into consumer behaviour and then use of either their preferred entities for sales leads or the launch of private labels to serve these identified ‘hot’ customers. Since foreign retailers understand the D2C retail game better, they try to create surrogate models to achieve the same goals instead of building marketplaces in India. Lack of standardisation of pricing, policies and business terms for small and large sellers working with foreign retail marketplaces.

“MNC platforms as well as a few Indian ones have created a mess for small and medium retailers since their discounts are killing retail businesses who, as it is, operate on wafer-thin to zero margins, especially in the mobile sector,” rued Ganeshvaran, President, TN Distributors Association.

Arvinder Khurana, AIMRA, added: “large e-commerce portals are flouting FDI rules at every level and tying up directly with brands to offer deep discounts that we cannot match. As a result over 40,000 mobile shops have shut down in the last 2 years. Portals now have 55 per cent market share in mobiles whereas mobile shops have seen 60 per cent loss in business.”

Published on April 15, 2021

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