CAIT against sale of private labels by e-commerce firms
today Jan 8, 2019
The Confederation of All India Traders (CAIT), a body representing traders across India, is now opposing the sale of private labels by e-commerce firms on its marketplaces.
Traders' body CAIT has received a shot in the arm after favourable responses from the government which tweaked e-commerce rules to end the deep discounting strategies of e-commerce firms and create a level playing field with fair competition.
CAIT had demanded clarity from the Department of Industrial Policy and Promotion on the sale of private labelling or branding under the foreign direct investment (FDI) policy in the e-commerce sector.
"It is submitted that if it (labelling) is allowed it will run contrary to the intention of the government to make e-commerce free from evils and malpractice and to provide an equal level playing field with fair competition. Such e-commerce companies will continue their ulterior motives through such loopholes as they are doing since last many years and small retailers will be killed," CAIT wrote in a letter to the Commerce and Industry Ministry.
E-commerce firms have been banking heavily on private labels for growth as it gives them better margins as compared to other brands sold on the platform. Over the years, e-commerce players have invested heavily on private labels across a variety of categories including apparel, home furnishing, and groceries.
It remains to be seen if the government accepts the demands of CAIT to appease the traders across India ahead of the forthcoming elections. The ban on the sale of private labels will have a severe impact on e-commerce firms as they have invested heavily in the development and marketing of these brands.
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