Union commerce minister of India, Piyush Goyal, has accused e-commerce companies of predatory pricing and killing small businesses in India. He further states that the rapid growth of these companies is not a matter of pride but rather of serious concerns. According to Goyal, this rapid growth is negatively impacting around 10 million small businesses in cities and more than 100 million across the nation.
In the launch event of the report Net Impact of E-Commerce on Employment and Consumer Welfare in India, he mentioned, “Are we going to cause huge social disruption with this massive growth of e-commerce? I don’t see it as a matter of pride that half our market could possibly become a part of the e-commerce network 10 years from now. It’s a matter of concern.”
Further, the minister mentioned he is not against the e-commerce industry but is looking for ethical considerations in the operations of major e-commerce players in India. Amazon and Flipkart are already on the radar of various government authorities for antitrust activities and face further backlash. However, the COOs of Amazon and Flipkart declined to comment on the remarks.
Piyush further adds that Amazon is a multi-billion-dollar e-commerce giant growing very fast, yet it has INR 6,000 crores in losses in its financial statements. This is mostly because they offer lucrative discount offers and pay hefty retainers to top lawyers to prevent them from filing lawsuits against them. He mentioned during the same event, “And how did that loss get caused? They paid Rs 1,000 crore to professionals. Unless you’re paying all the top lawyers to block them so that nobody can fight a case against them…If you make a Rs 6,000 crore loss in one year, does that not smell of predatory pricing to any of you? What did that loss come on? They are up to all the e-commerce platforms. They are not allowed to do B2C.”
