Online retailing giant Amazon’s tie up with Kishore Biyani’s Future Lifestyle Fashions Ltd to sell the latter’s 45 apparel labels online and pan out with other categories eventually is unlikely to result in a truce between online and offline formats with the two actively pursuing alliances for mutual benefit.
Online and offline retailers are on war path at present with the latter accusing e-tailers of resorting to predatory practices to grab a larger share of the $525 billion retail market in the country. In fact, traders body CAIT has threatened to move the Supreme Court and Competition Commission of India (CCI) if government failed to act on complaints of alleged unfair trade practices by ecommerce firms like Amazon, Flipkart and Snapdeal.
“The Future-Amazon deal is being blown out of proportion. Its just a deal between the proprietory brands held by Future Group that would be offered for sale on the e-tailers site. Thre is no arrangement at the corporate level,” said Arving Singhal, chairman of retail and advisory firm Technopak.
Last month, Croma, the electronics chain owned by the Tata Group, also signed a similar agreement with Snapdeal.com.
A source in the the Flipkart said that such arrangement should not be seen as closing proximity between online and brick and mortar retail formats but a relationship that exists in the online format with its vendors. “We have several vendors who sell their brands and products on out site and our endeavour would be to continue to expand this relationship by bringing in more players,” said the source. A questionnaire sent to Flipkart seeking their official views on the issue remained unanswered till the filing of the story.
The Future Group’s deal with Amazon also includes agreement to jointly sell products which will be developed by them across various categories. Interestingly, the tie-up has come soon after Biyani showed his discontent over anti-competitive practices by online retailers such as Flipkart. he was reacting to the Big Billion day Sale by Flipkart that saw prices of various products being brought to rock botton levels.
“Such a practice if continued, may result into unavailability of products in offline market which will further result into a monopolistic situation which will be controlled and dominated by the e commerce retailers,” CAIT National General Secretary Praveen Khandelwal had said opposing online retailers sale initiative.
Industry body Assocham has, however, come out in support of online retailers saying that the Flipkart incident resulting in inconvenience to enthusiastic customers on the Diwali offer should be taken at the most as one-off case and let it not be used as a ploy to subject e-commerce space to regulation over and above the rules of the game which are applicable to normal business.