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Small Retailers Organise ‘Asmbhav’ to Highlight ‘Malpractices’ of Amazon, Other E-tailers

As Amazon organises its annual event ‘Smbhav’, retailers associations allege that the e-commerce companies are organising events to hide their ‘malpractices’.
Small Retailers Organise ‘Asmbhav’ to highlight ‘Malpractices’ of Amazon, Other E-tailers

Image Courtesy: Yahoo Finance

New Delhi: A collective of retailers associations representing over six lakh small-sellers organised an online virtual event called ‘Asmbhav’ (impossible in Hindi) on Thursday in protest against alleged “malpractices” of multinational e-commerce companies. Amazon is conducting its annual summit called ‘Smbhav’ (possible in Hindi) between April 15 to April 18.

Amazon's four-day virtual summit had Union Minister Nitin Gadkari as a keynote speaker on Thursday. The collective of small sellers organised the counter event to highlight the “malpractices” of foreign e-tailers and their methods of taking advantage of “policy loopholes” for expanding their businesses.

Online platforms of both, multinational companies (MNCs) and big Indian companies have created a “mess” for small and medium retailers with their offered discounts damaging retail businesses which are now operating at low or zero margins, especially mobile retailers, said Ganeshvaran, president of the TN Distributors Association, at the event.

Among the key issues raised by retailers in ‘Asmbhav’ included the concerns of retailers over the alleged violation of FDI norms and the competition law by e-commerce platforms. They also demanded a stringent e-commerce policy that ensured a level playing field for small and medium retailers and sellers.

The event mainly focussed on the problems of small retailers and sellers and the lack of regulatory mechanisms against the practices adopted by e-commerce platforms.

Small sellers from various states shared their experiences of having suffered losses due to e-commerce marketplaces.

We are victims of the malpractice and monopolistic practices by the large ecommerce portals,” said Arvinder Khurana, National President of the All India Mobile Retailers Association (AIMRA). He added that there was no department or tribunal where retailers could go and complain about Foreign Direct Investment (FDI) violations.

According to smaller retailers associations, bigger sellers controlled by MNC e-commerce platforms have more than 90% of the total sales. They claim that they are helping five lakh retailers. However, smaller retailers argue that only five big retailers are able to get about 90% of sales.

In January last year, India’s anti-trust watchdog, the Competition Commission of India (CCI) ordered a probe into alleged violations by e-commerce giants Amazon and Flipkart after having received several complaints from retailer associations. However, the Karnataka High Court put it on hold after Amazon argued that there was no sufficient evidence for CCI to initiate a probe. Subsequently, the CCI challenged the stay order and the case is currently pending in the High Court.

In February, Reuters, citing Amazon’s internal company documents, reported that “Amazon favored big sellers on its India platform – and used them to maneuver around rules meant to protect the country's small retailers from getting crushed by e-commerce giants.” According to the report, “some 35 of Amazon’s more than 400,000 sellers in India at the time accounted for around two-thirds of its online sales.”

On Thursday, as the case went for hearing in Karnataka High Court, Amazon’s counsel Gopal Subramanium told the court that the company did not agree with the Reuters report and CCI could not use it as “evidence” for initiating the probe.

During the ‘Smbhav’ event, Amazon announced its plans of bringing one million offline retailers and neighbourhood stores on the e-commerce platform by 2025, as part of its ‘Local Shops on Amazon’ program.

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