CAIT accuses Flipkart's Shopsy of predatory pricing, demands investigation

By

Isabelle Crossley

Published
Apr 15, 2022

The Confederation of All India Traders has accused Flipkart’s value arm Shopsy and its Rs 5 stores of violating foreign direct investment regulations by deep discounting goods which it says is putting Indian stores out of business.

“How is a small trader expected to compete with such loss making Rs1/ Rs5 stores?” asked CAIT’s national secretary general Praveen Khandelwal in a letter to the Union Finance Minister Nirmala Sitharaman, ER Bureau reported. “How can there ever be a level playing field for small traders if foreign owned e-commerce companies are allowed to get away with such blatant disregard for laws of this country?”
 
Khandelwal has not only criticised U.S.-based Walmart-owned Flipkart for alleged deep discounting practices to eliminate domestic competition, he has also lobbied against Chinese-owned Shopee with similar accusations. However, the Competition Commission of India dismissed CAIT’s complaints against Shopee as it said it does not hold significant market power.

“The current laws clearly preclude such companies from deep discounting practices, however, such companies claim that these discounts are actually funded by their suppliers and not by the platform,” wrote Khandelwal.

“But which supplier, except for their own inventory held companies would fund such loss making endeavours? These e-commerce companies have scant regard for e-commerce policies and FDI regulations and are further emboldened by the fact that no stringent action has been taken against them by the requisite authorities.”