The battle between the e-commerce swish set and the brick-and-mortar retailers is back again on legal turf. The Retailers Association of India (RAI) has approached the Delhi High Court once again reiterating its demand for a new FDI policy that can be applied to all retailers and has also asked the government to clearly define the terms retail and marketplace. The case is expected to be heard on November 19.
In an earlier hearing on May 21, the Delhi HC had directed RAI to discuss the matter with the government, failing which they could approach the court again after four months. RAI, the industry body that represents over 1,000 retailers, including Shoppers Stop, Reliance Retail and the Future Group, had approached the government as per the directive but failed to make any progress.
The e-commerce companies, under the garb of being marketplaces are, simply put, retailers operating on internet.
Since they directly deal with customers, and control the pricing of products they can’t be called marketplace business, the retailers allege. Many offline vendors have lost on their business during festive season as they are unable to compete with the prices offered by online companies,” Kumar Rajagopalan, CEO at RAI told FE.
He said due to the lack of clear government policy on FDI in retail, traditional brick-and-mortar businesses are facing stiff competition and in categories such as electronics and footwear, they are running under loss.