NEW DELHI (Reuters) – Amazon.com (AMZN.(O) has defended its business strategy in India, came under fire on a local trader’s group on Friday on bargain-priced products on the global e-commerce giant’s website.
FILE PHOTO: A shipment is moving on a conveyor belt at an Amazon fulfillment center on the outskirts of Bengaluru, India, from September 18, 2018. REUTERS/ Abhishek N. Chinnappa
E-commerce, foreign investment regulations, which came into force in India in February, were designed to help the small traders is due to, in the case of the heavy online discounting, but traders have complained that large online retailers use complex business structures to get around the rules and continue to burn for billions of dollars worth of discounts on offer.
It is a problem that has grown to become one of the largest trade irritants between New Delhi and Washington.
In an open panel discussion on Friday organized by the indian competition watchdog of the Confederation of All India Traders (cait) has repeated its objections to Amazon’s senior corporate counsel to the company, Rahul Sundaram, sparking a heated public fight. The gs, which represents the over 500,000 merchants and traders, based in India.
Sundaram said the Amazon is in compliance with all the rules, and it has no effect on the prices of the products, its web site, adding that the company has potential for growth to more than 500,000 vendors, of online.
The trade body, however, was not in the mood to come to terms with Sundaram’s statement.
Cait’s Praveen Khandelwal pointed out, Sundaram, that is an air-conditioning unit, which is available at 42,000 rupees in the offline retail market, and was sold for 35,000 rupees, on Amazon’s web site and asked: “what is that “magic” has been used for the benefit of such a discount.
Sundaram hit me back with a personal example, saying that he had a half-day sightseeing tour in New Delhi, the markets and buy an air conditioner and managed to squeeze in a discount of 6,000 rupees.
“It has to be a factor in the whole of the retail market is that you can get a discount,” he said.
The new rules will be introduced in February and followed up with complaints from small traders, said that the e-commerce giants, such as their control over the supply of its affiliated suppliers to create an unfair market.
In June, the Indian government has warned of the Amazon’s and Walmart’s (WMT.(N) Flipkart is that they need to provide for the enforcement of the new regulation that will allow for deep discounts, which will affect the small retailers.
At a given point in time during the course of a week’s discussion on Amazon s s Sundaram, said that the company is in 57 warehouses in India to provide logistical support to small merchants and traders, which served only to annoy the Khandelwal continues.
“We can’t … Don’t call us’ small, please,” came cait’s representative’s angry retort.
Reporting by Aditya Kalra; Editing by David Goodman