Govt seeks details of top 5 sellers from Amazon, Flipkart: Reports

Govt seeks details of top 5 sellers from Amazon, Flipkart: Reports
Photo Credit: Photo Credit: Reuters
21 Oct, 2019

Ecommerce giants Amazon and Flipkart have been asked to disclose the names of top five sellers on their platform as well as the price list of goods of preferred vendors and the kind of support provided to sellers, according to several media reports Monday.

The department for promotion of industry and internal trade (DPIIT) has also asked the two platforms to share their capital structure, business model and inventory management system as per the sources cited by the reports.

The Confederation of All India Traders (CAIT) have time and again alleged that these companies indulge in predatory pricing, deep discounting and use other unfair business practices in violation of foreign direct investment (FDI) policy of the government.

In a statement on Sunday, CAIT criticised partner-banks that offer cashbacks, discounts for transacting through their services on ecommerce platforms.

“It is a vicious nexus of brands, banks and other service providers which is creating large level of distortion in ecommerce market of the country and creating an uneven level playing field which runs contrary to both FDI policy and Competition Act,” it said.

Late last week, minister for commerce and industry Piyush Goyal cautioned ecommerce firms against these allegations of FDI violations and warned them of stern action.

"Ecommerce companies have no right to offer discounts or adopt predatory prices. Selling products cheaper and resulting the retail sector to incur losses is not allowed," Goyal said to reporters on Thursday.

Amazon and Flipkart did not respond to TechCircle’s requests for comment on the matter at the time of filing this report.

India allows 100% FDI in the marketplace model of ecommerce, which it defines as a tech platform that connects buyers and sellers.

Late last year, India had made changes to the FDI rules for its flourishing ecommerce sector. Currently, FDI is not allowed in inventory-driven models of ecommerce as a measure to protect the country’s unorganised retail sector.

So, Amazon and Flipkart can only operate the marketplace model in India.

The two platforms and its rivals in the country’s ecommerce domain could report sales of around $6 billion this festive season, according to market research firm RedSeer.