Flipkart, Amazon to team up against govt's 'populist' e-commerce policy

Fearing a populist and tilted e-commerce policy, online marketplace giants Flipkart and Amazon are planning to form a united front. Taking the help of industry bodies Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce & Industry (Ficci), e-commerce firms, along with investment giants such as SoftBank, Tiger Global, Sequoia, and Naspers, are planning to have a dialogue with the government soon, it is learnt.

According to sources, the additional guidelines – which put a stop to flash sales and bar online marketplaces to sell via vendor firms they have stake in – have caught the players off guard. Industry players fear that in the run-up to the general elections, populist measures being taken to appease traders will have a direct impact on the long-pending e-commerce policy.

“There is tangible fear that the government might make a policy that makes it unviable for Amazon and Flipkart to continue business in India. 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,” said a source close to the developments.

Industry experts believe e-commerce firms, especially Amazon India and Flipkart, are being unnecessarily targeted as offline retailers have for long owned private labels. “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 have a run with their business plans. Let the Competition Commission of India look into any issues, if there are any,” said Arvind Singhal, chairman, Technopak Advisors.

The companies believe that if they have to shut down or cut down the amount of business they do from their private labels, it would have an impact on the number of direct and indirect jobs they provide and might have to rethink their expansion plans in the country.

The e-commerce policy has for long been a cause for concern for the burgeoning digital marketplace sector in the country. Early last year when the draft e-commerce firm was announced, many alleged it to be one-sided and highly tilted towards Indian firms and traders. 

SoftBank Group had then written to the NITI Aayog, commerce ministry as well as officials of the finance ministry, asking them to keep in mind the interests of investors and other stakeholders before finalising the e-commerce policy. 

Trader bodies such as Confederation of All India Traders (CAIT) and Swadeshi Jagran Manch have been constantly putting pressure on the government to bring out an e-commerce policy that keeps in mind the interests of traders.

“The business community of the country stands in solidarity with the government on issue of changes made in the FDI policy in e-commerce for bringing transparency, level playing field, and fair competition. It brings to end an era of unethical business practices of exclusivity, predatory pricing, deep discounting, and loss funding being constantly adopted by global e-commerce players,” said Praveen Khandelwal, secretary-general, CAIT. 

CAIT has said categorically that any move to bring further changes in the FDI policy to the advantage of global players under any kind of pressure would be opposed by them.