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Swadeshi Jagran Manch: Ecommerce discounting causing loss of jobs in traditional retail

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The Swadeshi Jagran Manch (SJM) has passed a resolution within its organisation asking for an ecommerce policy which will lean towards small retail traders and protect their interests, reports The Hindu. According to a BT report, the organisation also wants the government to not extend the 1 February deadline for implementation of the FDI in e-commerce policy. Last week, Amazon and Flipkart had asked the government for an extension for 4 and 6 months respectively.

We have contacted the SJM for further details and will update this once we hear from the organisation.

What the SJM said in its resolution meeting

  • In its opinion, ecommerce giants like Flipkart and Amazon are flouting laws causing damage to the livelihoods of offline traders.
  • The offline retail trade has suffered job losses due to “indiscriminate discounting” and “predatory pricing” policies (cash burning model) by ecommerce companies
  • The organisation added that the government’s new FDI policy should prevent these companies from having sellers in which they have stakes (Cloudtail which accounts for 70-80% of total sales for Amazon, and WS Retail which pulls 30-40% of total sales for Flipkart, for example), but Amazon and Flipkart continued to sell via these sellers.
  • The organisation called for ecommerce companies to be “dealt with according to law.”
  • The organisation laid out that Chinese sellers were selling Chinese goods on these platforms illegally. It had evidence of 200,000 orders being fulfilled daily.

According to the report, SJM offered unspecified measures to the government to:

  • Prevent Chinese goods being sold illegally
  • Halt deep discounting
  • Foreign currency transactions and
  • Illegal activities of Chinese apps (no further details)

Platforms are not illegal, offering discounts is illegal – Ashwani Mahajan

Note that in October last year at a #NAMApolicy discussion on ecommerce in Delhi, where various stakeholders discussed the ecommerce policy, Ashwani Mahajan, the national co-convener of SJM said, “You [e–commerce businesses] have incessantly been giving discounts and will continue to do it for years, jab tak mere desh ka har vyaapari vyaapaar se bahar na ho jaye (until every trader of my country is thrown out of business).”

On discounting, Mahajan said, “Everybody has a right to remain in this ecosystem, and I want to be very clear — we are for ecommerce, not against ecommerce. We are against the wrongoing, illegal activity and circumvention of the law by ecommerce firms…. Platforms are not illegal, offering of discounts is illegal. Press Note 3, which is the law of the land, allows platforms. How can I be against it?”

On whether platforms benefit small traders, Mahajan said, “Foreign money is shutting down not just small traders, but also our own smaller ecommerce companies. When a platform sells something at 20-30% discount, the small ecommerce player cant operate. The discounting is funded by foreign money.”

Read our ecommerce coverage here, and #NAMApolicy on ecommerce event coverage here.

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