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Traders object to online festive offerings

Traders in India are against Amazon and Flipkart festive sales.

According to them, deep discounts violate the country's foreign investment rules for online retail and that these companies influence prices.

The two e-commerce firms typically hold annual festive season sales ahead of Dasara and Diwali, which are due this year in October, when Indians make big ticket purchases such as cars and gold jewelry. Both e-tailers offer big discounts on everything from fashion to smart phones to home appliances. India does not allow foreign direct investment in inventory-driven models of e-commerce, where goods and services are owned by an e-commerce firm that sells directly to retail customers. It modified e-commerce rules late last year to protect the country’s vast unorganized retail sector that does not have the clout to purchase at scale and offer big discounts.

Those rules forced Amazon and Flipkart to reconfigure ownership structures and re-jig some key vendor relationships and agreements. There are more than a lakh sellers on Flipkart’s platform. More than five lakh sellers on Amazon- a bulk of which are small businesses, women entrepreneurs, startups, weavers and artisans - use the festive sale to reach customers. Sellers decide the pricing for their products on this marketplace.

 
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