PREDATORY PRICING BY ETAILERS: WHAT'S BEHIND THE OUTBURST?

UNION commerce and industry minister Piyush Goyal has stirred up the pot by letting go a broadside against Amazon and other ecommerce players.

- GURBIR SINGH

Attacking these e-retailers for 'predatory pricing', Goyal alleged they were slowly killing the vast network of small, mom-and-pop shops through unfair competition. He also suggested Amazon was passing off fund infusions to cover ₹6,000 crore of losses by disguising them as investments.

"If you make ₹6,000 crore loss in one year, does it not smell of predatory pricing?" he asked, claiming many e-tailers were violating foreign direct invest (FDI) laws.

It is ironical the minister for commerce and industry should be complaining of the bad ways of the big e-tailers! Traders through their apex body - the Confederation of All India Traders (CAIT) - have been begging the government for years to take action against predatory pricing. To no avail! It is ironical that Goyal was speaking at an event where a think tank, Pahle Foundation, released a report that showed ecommerce was still small play in India, and that in fact retailers had benefited hugely from combining brick-and-mortar stores with ecommerce sales.

As per the report, while ecommerce is indeed growing at a fast pace, it comprised only 7.8% of total retail sales in 2022. The report estimated that there were 1.76 million online vendors, who had added 16 million jobs, including 3.5 million for women. It report also said 60% of small city vendors had reported increased sales since they had started selling online.

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