Parul
Commerce and Industry Minister, Piyush Goyal raised concern about the functioning of the E-commerce sector, saying that E-commerce is eating into the small retailers by giving heavy discounts on products.
Goyal charged E-commerce players with predatory pricing and not giving a level playing field to small retailers.
Speaking at an event for the Report Launch on ‘Net Impact of E-Commerce on Employment and Consumer Welfare in India Goyal said, “What does e-commerce do we all think that?, they are making things so much cheaper. If I go to a store and buy a five-star chocolate or a box of chocolates, It’s going to cost me 500 rupees. I can get it delivered on e-commerce for 350 rupees. It’s because that’s the item that had the largest margin. E-commerce is eating into the small retailers, high value, high margin products, which are the only products through which it survives.”
He said that the growth of e-commerce doesn’t attack every corner of the retail store but it is a matter of concern.
“Are we going to cause huge social disruption with this massive growth of e-commerce? And I don’t see it as a matter of pride that half our market could become a part of the E-Commerce Network. Ten years from now” the Minister said adding that he doesn’t deny the role of the e-commerce sector.
He further emphasised the need to make the sector more organised, mentioning the predatory pricing being adopted by the players.
Raising the predatory pricing adopted by the e-commerce platform, the Minister said, “If you make six thousand crore loss in one year does that not smell of predatory pricing to any of you?”
“When Amazon says we are going to invest a billion dollars in India and we all celebrate, we forget the underlying story that this billion dollars is not coming for any great service or investment to support the Indian economy,” he said.
The Commerce and Industry Minister questioned Amazon and said, “They made a billion-dollar loss in their balance sheet that year, they had to fill in that loss. If you make 6000 crore loss a year doesn’t it sound like predatory pricing to you? They are after all an E-commerce platform, they are not allowed to do B2C, legally…However, the reality is all of you buy on these platforms, how are they doing it? Should it not be a matter of concern for us?”
The minister said the predatory pricing and huge discounts by big e-commerce players will create a disruption in the businesses of India’s 100 million small retailers and the government is concerned about that.
