Amazon India Accused of Favouring its Subsidiary Merchants, Small Sellers Boycott Super Sale Events

As Flipkart and Amazon India begin their festive season sales this week, the All India Online Vendors Association (AIOVA) on Friday filed a petition with antitrust regulator, Competition Commission of India (CCI), alleging that the Amazon India favours merchants that are its subsidiary, such as Cloudtail and Appario.

While Appario Retail Pvt Ltd is a wholly-owned subsidiary of the joint venture between Amazon India Ltd and Ashok Patni, the co-founder of Patni Computer System, Cloudtail, which is the largest seller on Amazon India, is a joint venture between Amazon Inc. and Infosys co-founder N.R. Narayana Murthy’s Catamaran Ventures.

AIOVA, which represents more than 3,500 online sellers, said that large sellers partly owned by Amazon India such as Cloudtail and Appario are being given preferential treatment by charging significantly less than Amazon's advertised rates for other sellers.

AIOVA has asked CCI to impose a "severe penalty" for unfair practices and to restrict what it says are "preferred sellers" from participating in Amazon India's annual festival sales, which start this week.

Amazon India however has denied the accusations ad said that all sellers on its platform are treated equally.

“Amazon has an equal relationship with all the sellers on our marketplace,” Amazon India spokeswoman Bhumika Shah said in an email to Reuters, adding that the company is “absolutely committed” to compliance with local laws.

Besides Amazon, Flipkart too has been accused of giving preferential treatment towards large sellers such as WSRetail, which is Flipkart's subsidiary merchant.

Meanwhile, several small merchants have decided to nearly-boycott the upcoming festive season online sale events this year by not to actively participate in the e-commerce giants’ flagship events. Both Flipkart and Amazon India have scheduled their flagship sales—Big Billion Days and Great Indian Festival, respectively—to begin on October 10.

Earlier this year in May, AIOVA had filed a similar petition accusing Flipkart of preferential treatment towards big sellers, enabling them to provide huge discounts, hurting the business small and medium sellers.

In interactions with nearly a dozen online sellers, ET has also reported that small sellers have reduced their activity on Flipkart and Amazon India because of the e-commerce companies’ seeming preference to vendors such as RetailNet, Super-ComNet, OmniTech Retail (Flipkart), Cloudtail and Appario (Amazon India), and their own brands.

~ Reuters

[Top Image - bnnbloomberg.ca]

Major Scuffle Between E-Commerce Vendors and Commerce Ministry

The Scuffle between e-commerce vendors on one side and commerce ministry along with e-commerce companies on one side is catalyzing day by day.

Few days back AIOVA, an e-commerce vendors association had issued a trade advisory notice against e-commerce firm Flipkart for recording wrong weights for shipments.

Now in a new turmoil Nirmala Sitharaman has outrageously said that the commerce minitry is still undecided on forming an e-commerce regulatory body, giving a setback to hopes of e-commerce vendors in the country.

No Decision By Govt On E-Commerce Regulatory Body

The minister of state for commerce and industry, Nirmala Sitharaman, said the government has not reached a decision on setting up a central regulatory body to monitor e-commerce companies as of now.

The statement was made in response to queries raised by the members of the opposition in the Rajya Sabha on Wednesday based on representations made by the All India Online Vendors Association (AIOVA), an association of vendors who sell products on marketplaces such as Amazon, Flipkart and Snapdeal.

AIOVA issued a statement saying that, "The minister is nowhere mentioning that vendors also require similar support which is being given to the consumers. Our association has laid out multiple representations in media, to ministry, DIPP, RBI and Niti Aayog."

Nirmala Sitharaman said that -- E-commerce activities are governed by a number of Regulations Acts and no decision has been taken by the government for setting up a regulator for e-commerce."

In response to a related question, Sitharaman acknowledged that the government had received communication from AIOVA to resolve issues related to payment settlement for online sellers."No such data (on quantum of business done through e-commerce sites in the country) is centrally maintained," the statement said.

Commerce Ministry "Scooting" E-Commerce Issues

Besides, AIOVA also alleged that despite multiple pleas, the Commerce Ministry is running away with their issues with respect to the marketplaces such as Amazon, Flipkart and Snapdeal, and appealed for intervention from a higher authority.

In September, the association had met Nirmala Sitharaman to request her to take up the pending payment issue of cash-strapped e-commerce firm AskMe.

AskMe's shut down left around 4,000 people jobless and several vendors without payments.

There hasn't been a concrete solution offered on that so far.

"The minister should understand that the said companies are e-commerce marketplaces who have collected money from consumers on sellers behalf and not reimbursed to sellers. The minister had met the representatives of our association in 2016 and had assured to look into our problems, however, there is no headway into the same," the association said.