ShopClues CEO criticises “colonialism” of foreign owned e-commerce giants
today Jan 7, 2019
ShopClues’ CEO Sanjay Sethi has criticised large foreign businesses for taking over India’s e-commerce market and implored the government to enforce regulations to protect smaller, domestic players.
Sethi told the Economic Times that he fears “a version of British era colonialism” should foreign direct investment (FDI) continue to be channeled only into large foreign-owned online businesses. Following the Department of Industrial Policy and Promotion’s (DIPP’s) policy update on FDI, the rift between domestic online businesses and US-owned Amazon India and Flipkart has come to the fore.
"Driven by their expansionist agenda to grab as much land of the Indian consumer as possible, by whichever means available, coupled with practically non-existent enforcements of our own laws, it created a situation where the spirit of the law was blatantly and continuously violated by these companies under the guise of ‘but customer is winning’,” said Sethi of Amazon India and Flipkart’s rapid expansion and practice of deep discounting.
Calling the current state of India’s online market “unsustainable and harmful”, Sethi argues that Indian consumers may feel like they are winning in the short term with heavily discounted items but they are in fact losing in the long term as the economy as a whole is being usurped by foreign business.
ShopClues, an online fashion retailer, recently forayed into brick-and-mortar retail at the end of last year and aims to expand across India. The business is smaller than its US-owned competition and offers less extreme discounts but maintains that its domestic credentials are better for the Indian consumer long term.
Sethi applauded the DIPP’s new FDI policy clarification but also opined that the government’s failure to address the situation earlier has created an unhealthy economic environment. Sethi’s view is echoed in the Confederation of All India Traders’ (CAIT’s) statements in support of the policy note.
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