NEW DELHI (reuters) – The Indian government is looking into the question of whether the heavy discounts offered at the wal-mart property and Flipkart Amazon.com during the online festive sales, violation of foreign investment rules, a trade ministry official told Reuters.
FILE PHOTO: the logo of The indian e-commerce company, Flipkart can be seen in this illustration photo in January 29, 2019. REUTERS/Danish Siddiqui/Image/File Photo
India introduced new regulations in February aimed at the protection of the 130 million people depend on small-scale retail stores to deter online with a discount. The rules have forced the e-commerce companies to tweak their business structures and it drew criticism from the United States of america, and the straining of trade relations between New Delhi and Washington.
While Amazon and Flipkart are saying that they are in compliance with the federal rules, the local trader to groups of, say, the two companies are who they are due to the burning of the money to offer discounts of more than 50%, in some cases, during the ongoing festive sales.
Reuters reviewed e-mails, and in-house training materials from Flipkart and the notes of the company and, in some cases, demand reduction, or, the disposal of the committee of merchants which offer discounts.
The ministry of commerce official told Reuters that the government’s review of the complaint and the evidence submitted by the Confederation of All India Traders (cait), a group of about 70 million bricks-and-mortar retailers, including Amazon and Flipkart have been in violation of the foreign investment rules.
The official declined to comment on what you can do, but to the leaders of Amazon and Flipkart have been invited to meet with the trade officials of the ministry last week to discuss the matter.
Flipkart in a statement said that it had a “nice conversation” with the authorities, and he was very concerned about doing things the right way in India.
Amazon said that it was an “open and transparent discussions with government officials, and has set a high bar for compliance.
Attract buyers around the the most important Hindu festival of Diwali, both the retailers have placed full-page ads in top national newspapers-the Times of India, to present a discount offer is running from Samsung and Apple’s phones, clothes, and diapers.
“Our customers have been online for the amazing discounts. Because of this, selling to offline businesses, has been reduced from 30% to 40% for the month,” cait secretary-general Praveen Khandelwal said.
E-mail is received by the Flipkart representatives in September, a few days before the first phase of this important sale, the offer to partially fund the discounts.
The company would “burn” for 3% discount if the seller lowers the price by 15%, and 9% if the seller has a discount of 30%, said in an e-mail.
In the course of the material that is posted on Flipkart, it is a limited site for its sales staff, seen by Reuters, calls for the company to prepare for the holiday season by saying, “there is nothing greater than this, and to explain how they will be able to benefit from the discount of the product, for Flipkart’s premium customers.
FILE IMAGE: the Packages travel along a conveyor belt, are reflected in a mirror on the inside of an Amazon fulfillment center in Robbinsville, New Jersey, united states, November 27, 2017. REUTERS/Lucas Jackson/File Photo
“We want to make sure that you get as much profit from it as possible … what is the discount that you are offering, half of which will be refunded to you by Flipkart,” a post said.
Of a Flipkart a source said that the incentives were to comply with the Indian laws and were aimed at the promotion of the vendor revenue, and the effect of reducing the commission they pay for it.
All of India’s Online retailers ‘ Association, which has about 3,500 members in the selling of products at a variety of online platforms including Flipkart, in a statement, said fewer than 100 of its members to take advantage of Flipkart, it is a part of discount financing and some sellers an unfair advantage.
Reporting by Aditya Kalra; Editing by Euan Rocha and Kirsten Donovan