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E-commerce giants in India, Flipkart and Amazon.in, won’t be able to give any kind of discount from 1st February 2019.
We all have observed that from last 4 to 5 years, all the e-commerce companies grew rapidly. The only reason for such exponential growth is discounts and cash-backs. It can be the Flipkart’s Big Billion days or the Amazon’s the Great Indian sale.
The government of India has focused mainly on Amazon and Flipkart because these two have captured more than 75% of the Indian e-commerce market.
Paytm mall will also not be able to give any kind of discount.
Walmart owned Flipkart and Amazon India are breaking the law of the Indian e-commerce market every day. That’s why the government had to take action against them.
Amazon India, Flipkart and Paytm give so much discount and also provide free home delivery most of the times.
As a result, people in metro cities don’t go out to buy things. That makes a big loss to the local retailers of a particular city. It might sound a small thing but India’s unorganized businesses industry is more important than organized because it gives employment to a lot of people.
The Trade Union of India was against the e-commerce companies not only because of their existence but also because of providing so much discount.
Have you ever thought how can these companies offer so much discount? The answer is Investment and loss-leadership.
These three e-commerce giants are making a loss of millions of dollars. Why? Because they want to capture the market. They want people to buy the things they want from their platform.
How do they offer discounts on every product?
For instance, they have purchased item ‘x’ from the whole seller in 100 Rs and let’s assume the price of item ‘x’ in a retail store is 110 Rs. We all know, no one can give more discounts than whole sellers. Now, what they will do is, they will start selling item ‘x’ at 90 Rs.
By doing this, these companies started disrupting the ecosystem. People will stop buying from retail stores. In a long run, there would be few retail stores and people will not prefer to go there and buy because by then it would be a habit of ordering online.
This becomes the monopoly market. Now, they destroy the retailers by offering discounts. Then, they will not give you any kind of discount offers. And people will still prefer e-commerce to buy things.
The e-commerce giants have broken the laws of FDI(foreign direct investment). Amazon and Flipkart both are doing the business as FDI is 100% in Indian retail market.
As per the law of the Indian e-commerce market, there should be any kind of ‘exclusive product’ for selling. That means the company is giving more advantage to the only few companies.
Also, Amazon and Flipkart cannot sell their own product on their platform.
This thing is not a good news for consumers. There will be no discount or less discount. And, the difference of price between online and offline will reduce.
The most important purpose is to save millions of retail outlets in India. Ecosystem should be maintained.
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All the articles are written by Anuj Vohra