CCI initiates deep discounting study for online retail
today Sep 18, 2019
The Competition Commission of India is looking into the use of deep discounting by e-commerce businesses ahead of the upcoming festival sale season and the organisation has launched a survey on the practice.
The CCI aims to crack down on investigating deep discounting during the upcoming sale season when large e-commerce businesses often offer very large discounts on products ranging from fashion and beauty to electronics, ET Bureau reported. The organisation believes that deep discounting harms businesses as it reduces the perceived value of products and services for consumers, the CCI’s chairperson Ashok Kumar Gupta told ET Bureau.
The CCI is also carrying out a study on the practice of deep discounting in e-commerce. The interim findings show that companies, especially smaller businesses, can become unviable if deep discounting is carried out for too long. Offline retailers have also complained that e-commerce retail has forced them to lower prices in order to compete.
The Confederation of All India Traders has also spoken out against deep discounting and stated that it violates foreign direct investment regulations when foreign-backed businesses engage in the practice. The sale season begins on September 29 and larger retailers are expected to offer discounts of up to 80%. The CCI and CAIT hope that the upcoming government e-commerce policy, which is currently in draft form, will regulate against deep discounting.
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