12/10/2014 ….. “The e commerce business in India is like an open play ground where every player is free to play game as per its own whims and wishes and setting its own Rules and Regulations, mo matter how detrimental it could be either for the economy or for rest of the stakeholders”-said Mr. Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT). He was speaking today at a meeting of the National Governing Council of CAIT held at New Delhi especially convened to discuss current scenario of e retail business and its fall out on offline market. The meeting was attended by prominent trade leaders of 22 States and chaired by CAIT National President Mr. B. C. Bhartia.
The unrealistic prices, unfair competition, unhealthy business practices, predatory pricing have damaged the business of of offline market to the tune of 35% in various segments and therefore the CAIT will launch a nationwide movement demanding the Government to form a Regulator and Laws and Rules to govern e commerce business in India. A nationwide Dharna will be held on 1st November,2014 to attract attention of the Government-declared CAIT.
Foreign Funding in e retail is nothing less than FDI in multibrand retail and since the Government is committed not to allow FDI in mult ibrand retail, there is an urgent need to block any loopholes in e retail business which may give opportunity to MNCs to enter into retail trade of India as a backdoor entry via e retail business. Beside traders, the CAIT will also rope in other sections of non corporate sector including SMEs, Farmers, Transporters, Truck Operators, Hawkers, Labour Union, Cooperative Groups, Self Entrepreneurs and others in its nationwide movement.
The CAIT regretted that though it has cautioned the Department of Industry Policy & Planning (DIPP) of Ministry of Commerce in a memorandum submitted on 6th November, 2013 regarding likely ill practices of e retailers, no cognisance was taken by the DIPP and no steps were taken to spell out parameters and modalities for e retail business.
The present structure and operations of online retail portals came under heavy fire at the meeting. The trade leaders alleged that e retailers are indulging into predatory pricing by giving unbeliveable discounts and lucrative offers which are not practical in normal business practices.
In a unanimous resolution adopted at the meeting, the trade leaders demanded the Union Government to immediately intervene in the matter and necessary reformative steps should be taken by the Government to make this format of retailing a clean business free from all sorts of mala fide policies and to ensure operations of bona fide business. Beside demanding investigation into business module of e retailers and regulatory authority for e commerce business in India, the CAIT has also demanded the Government to investigate the funding generation of e retail players.
There is a need to study E commerce and E retail independently though sounding similar but both terms are significantly and fundamentally different from each other. The set of corporate investors who first lobbied for FDI in multibrand retail may be the same forces who are operating the e retail sector behind the curtain.There is a need to investigate the business modalities of the online retailers in cases where they receive financial funding in their portals from overseas and selling in retail in a different business entity. These companies on the one hand are not making any profit yet they are able to sell products at significantly cheaper prices and also incurring huge expenses to develop and maintain their e-portals which itself is of high cost, cost of dedicated white collared employees, cost of high advertisements etc.
It is not the customer who voluntarily changed his buying habits rather the deep discounts, lucrative offers and other incidental things forced the customer to change from brick and mortar shops to online retail. To attract maximum traffic on their e retail portals, this strategy is being adopted that is why the unbelievable discounts and offers are being given and “Sales” are being organised by e retailers though they are not the owners of the inventory.