REINING IN BIG E-TAIL

THE GOVERNMENT’S COLD SHOULDER TO AMAZON BOSS JEFF BEZOS HIGHLIGHTS ITS AMBIVALENCE ABOUT LARGE FOREIGN E-COMMERCE FIRMS, AND THE CONTRARY PROTECTIONIST PULL IN ITS SUPPORT BASE

- M.G. Arun and Anilesh S. Mahajan

On October 3, 2014, 7, Lok Kalyan Marg in New Delhi, the official residence of the prime minister, was preparing to host a special guest. Billionaire Jeff Bezos, founder and CEO of the world’s largest online marketplace, Amazon, was scheduled to meet Narendra Modi, just months after the latter had assumed office. “He (Modi) has a fantastic international reputation. I am super excited to meet him,” Bezos said ahead of the meeting. This followed an announcement of an investment of $2 billion by Bezos’s company in India, as it took on home­bred e­tailer Flipkart. India, with its burgeoning middle class, was an exciting new place for Amazon to grow. To put it in Bezos’s words, India was “super­energising”.

Cut to January 2020. The 56­yearold’s visit caught national attention yet again, but for all the wrong reasons. Not only did the world’s richest man get the cold shoulder from the Modi government, but Amazon also had to go through the ignominy of being accused by commerce minister Piyush Goyal of “predatory pricing”.

On January 16, a day after Bezos announced another $1 billion investment in India—ostensibly to help small and medium businesses sell their products—Goyal commented that the e­tail giant was not doing any favors to India. He accused Amazon of pumping in money to cover its losses in India. “How can a marketplace make such big losses unless they are indulging in predatory pricing or some unfair trade practices? These are real questions that will need answers,” he said. Although Amazon has invested money in warehousing and certain other activities over the past few years, if it is bringing in money largely to finance losses in an e­commerce marketplace model, it does raise questions.