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Firing another salvo against e-commerce firms, the Confederation of All India Traders (CAIT) on Sunday complained to the Centre that some online marketplace biggies are flouting the consolidated FDI policy circular, 2015.
Referring to the upcoming “sale” events announced by Flipkart, Amazon and Snapdeal, CAIT alleged in a letter to the Centre that the advertisement campaigns addressed to the general public are tantamount to retail trading.
While Amazon has declared a “Great Indian Festive Sale” and Flipkart has announced a “Big Billion Sale” from October 13-17, Snapdeal has announced an “Electronics Monday” sale on October 12.
Circumventing the law
These e-commerce portals are circumventing the law and engaging in business-to-consumer (B2C) activities, which are prohibited for e-commerce marketplace portals, said CAIT.
It further urged the Department of Industrial Policy and Promotion in the Commerce and Industry Ministry to issue directions to these firms, restricting them from offering “sales” and “discounts”.
Praveen Khandelwal, National Secretary General of CAIT, said in the letter that these companies invite the general public to their respective sales through big advertisement campaigns on print, electronic and social media.
As these companies have received foreign investments, they are allowed to undertake only B2B, and not B2C e-commerce activities, the letter said.
Need for ads
If these e-commerce biggies are only doing B2B business, where is the need for big advertisements addressed to the general public, Khandelwal asked, adding that as marketplaces, they can only provide a technology platform for the sellers registered with them.
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