I read today and interesting news story , which friends I would like to share with all of you including my opinion on the same.
You all are aware that for last few years the digital sales platform like Flipkart and Amazon have become quite popular with buyers who have no time to go to shops or Malls for their needs. All these buyers found these digital platforms very useful, as it saves their time and additionally they get very good offers from these e- commerce/digital platforms and very attractive discount schemes.
Recently, complaint against two giants Flipkart and Amazon was filed by ‘Delhi Vyapar Mahasangh’ a group representing small and medium sized businesses, which alleged that several of Amazon and Flikkart’s preferred sellers were affiliated with or controlled by the companies themselves, either directly or indirectly. The complaint was filed with with India’s antitrust body-Competition Commission of India (CCI), and the body ordered an investigation into alleged competition law violation by Flipkart and Amazon. You must be aware that Flipkart is now owned by US based e commerce giant Walmart.
The CCI also wants its investigations arm to probe the e-commerce companies’ discounting prices as well as their relationship with such sellers, said in their order. This investigation is latest setbacks for Amazon and Walmart’s Flipkart, against whom the India’s small time traders have already alleged that these companies have violated the country’s foreign investment rules and wasted billion of dollars to offer steep discounts that hurt small traders.
It is an open fact that these e-commerce giants have spent huge amounts in discounts and other offers, which the small traders can not afford as they work on limited margins and from those margins they have to cover their establishment costs and eventual profits. Both these giants have suffered a loss of several billion dollars from their Indian operations.
Till few years back the products in Indian markets were sold through shops, and depending on the product shop owners were receiving their stocks either from Distributors or directly from manufacturers, but today the scenario is totally changed. The urban buyers who has habit of spending money digitally, find it very convenient to shop from these digital/e commerce platforms. Secondly all these platforms also have return or cancellation policy, if you do not like the product you can either cancel the order and ask for refund or return the product and ask for replacement.
Now coming back to complaints of small traders- it is also true that their business is suffering and along with that jobs of so many people have come to stake, who are working there in these shops/trades. These giants are making selective buyers very happy, and these are the same buyers who earlier used to go to malls and big stores and pay very fancy prices.
Now even Malls, which mushroomed in Metros and other cities during last 2 decades, are also feeling pinch and their sales are also showing down trends. Now the footfalls in Malls are reducing- earlier people used to go to malls for their shopping needs and then visit Food courts in the mall for eating, or after shopping visit multiplex cinema halls for watching movies. Now it is the reverse trend- people first go to food court or Multiplex, and then if they have time they might visit shops in the mall, and if they find some thing at reasonable rates to their liking then they might buy some thing.
In the last 2-3 years so many shops in the various malls in Mumbai have put their shutters down, because of business is not profitable now.
In the end the complaint of small traders is very genuine, but in this Electronic/digital age it is impossible to stop the on line sales either through any e commerce site or directly by manufacturer, even govt is promoting digital payment and digital business. But one thing is certain when after, maybe 10-15 years when maximum business will be through e commerce sites, then these multi national e commerce giants will start squeezing the manufacturers who want to sell their products through these platforms. Now shopkeepers/traders are complaining against them but at that time for these Indian manufacturers there will be no place to go, and then they will talk of reducing profits or difficult to survive, then who will be responsible. With India’s huge population, which will be increasing considerably in near future, it is high time that there should be some regulations for these e giants, as rural/lower class/lower middle class of India’s needs are different and will always remain different, so these 2 types of business have to co exist in India for years to come.
So what you say my friends.
Anil Maliik
Mumbai, India
14th Jan 2020.