Retailers Association breathing down etailers’ neck for alleged violation

Editor | Sep 10, 2020

Ecommerce companies just can’t seem to catch a break. The last two months (post-FDI period) have been filled with series of allegations, which all claim that etailers are not following the prescribed path.

The latest complainant is the Retailers Association of India (RAI). The retailers’ body has accused etailers Flipkart, Amazon, and Snapdeal of not sticking to the marketplace model.

They are looking to get law enforcement agency Enforcement Directorate (ED) involved in this issue.

“We are asking for an early investigation by the ED into the matter and we are going to take up this matter with the finance minister soon,” said Kumar Rajagopalan, Chief Executive Officer at RAI.

RAI’s accusations

RAI has been against 100% FDI in ecommerce from Day 1. They have been demanding fair FDI norms to fight etailers.

They insist that:

Etailers are offering discounts in spite of the curb on influencing the prices of products

Flouting FDI guidelines by selling their own brands (B2C retail)

Rajagopalan added,

“You cannot call yourself a marketplace to qualify for 100% FDI and then indulge in retail business. Some action has to be taken in this matter.”

The association is also against online marketplaces’ cash-back and money-back guarantee offers

Allegations Countdown

In the month of May itself, the Confederation of All-India Traders (CAIT) alleged that Flipkart violated ecommerce FDI norms. Then sellers’ cried foul and accused Paytm for not adhering to FDI rules by offering cash-backs. In April, DIPP asked online grocer Big Basket to prove if follows a marketplace model or inventory-led.

Will there be more allegations? Amazon has approached DIPP to discuss the ‘discounts & promotions’ clause of the FDI policy. Will Paytm, Snapdeal and Flipkart initiate similar meetings with the government?

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