Rivals Flipkart, Amazon line up allies to jointly fight new e-commerce policy: Report
Friday, January 4, 2019 IST
The companies fear that shutting down or cutting business under their private labels may impact the number of direct and indirect jobs they provide
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Online marketplace giants Flipkart and Amazon are planning to team up to voice concerns against the new e-commerce policy, according to a Business Standard report.
e-commerce platforms are planning to take the help of Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and investment giants such as SoftBank, Tiger Global and Naspers to hold a dialogue with the government.
These firms are set to suffer a big blow as the government has barred them from selling their own goods, while also putting an end to deep discounts and cashback schemes offered by them in the policy.
"There is tangible fear that the government might enact a policy that makes it unviable for Amazon and Flipkart to continue their business here. They will have to completely revamp the way they work and whatever they have achieved in the country till now would all dial back to zero. The sector is now planning to take the help of industry bodies such as CII and FICCI, as approaching the government via them would be much smoother," a source told the paper.
Experts are of the view that Amazon and Flipkart are being unnecessarily targeted as offline retailers have for long owned private labels, the report said.
"Physical retailers also have private labels. It is a legitimate business practice. There is no reason to single out e-commerce firms. It is not a publicly held firm, so they have every right to run with their business plans. Let the Competition Commission of India (CCI) look into any issues if there are any," Arvind Singhal, Chairman, Technopak Advisors, told the paper.
The companies fear that shutting down or cutting business under their private labels may impact the number of direct and indirect jobs they provide. They may also have to rethink their India expansion plans.
The government's move comes after local traders complained that they were being put out of business because of steep discounts that these e-commerce giants offered. The Confederation of All India Traders (CAIT) and Swadeshi Jagran Manch has been reportedly putting pressure on the government to rollout an e-commerce policy favouring the interest of local traders.
Players fear the government may take populist measures to appease traders ahead of general elections 2019.
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