Flipkart hits back at traders body against alleged FDI norms violation; calls it CAIT’s propaganda

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Published: September 17, 2019 5:31:55 PM

Last week in a letter written to the commerce minister Piyush Goyal and in a press conference on Tuesday, CAIT questioned Flipkart and Amazon for “organising festive sales, indulging into big ad campaigns when they are allowed to conduct B2B business only as per the FDI policy.”

CAIT had called for a blanket ban on festive sales of e-commerce companies this year. Photographer: Brent Lewin/Bloomberg

In response to allegations hurled at Amazon and Walmart-owned Flipkart by the traders’ body Confederation of All India Traders (CAIT) against their business models as a marketplace and more importantly the upcoming annual sale events of the two e-commerce giants, Flipkart Group SVP and Chief Corporate Affairs Rajneesh Kumar said in a statement that it is a “fully compliant organisation” and that “as a marketplace we connect businesses with consumers.” Last week in a letter written to the commerce minister Piyush Goyal and in a press conference on Tuesday, CAIT questioned Flipkart and Amazon for “organising festive sales, indulging into big ad campaigns when they are allowed to conduct B2B business only as per the government’s FDI policy.”

Flipkart on Tuesday continued to maintain its stand that being a marketplace it provides access to sellers, domestic manufacturers, MSMEs, and artisans to consumers shopping online in India. The company highlighted its contribution to “creating lakhs of new livelihood opportunities” and that it helps “local manufacturers to produce right products and help them cater to different customer segment appropriately,” based on customer insights it has, according to Kumar.

Also read: CAIT on Amazon, Flipkart festive sales: E commerce firms violating FDI norms, govt should take action

The traders’ body, however, said that such statements are devoid of any logic and these companies exercise direct control over the suppliers, prices and inventory in violation of the policy. CAIT asked Flipkart and Amazon to declare the names of first 10 sellers on their platform since last 5 years out of 100,000 sellers registered on Flipkart and 500,000 sellers registered on Amazon. “It will be found that the same set of entities are selling almost 80 per cent of the goods while the rest of the sellers do not find any opportunity of doing business on these platforms.”

With respect to the festive sale, on which CAIT had called for a blanket ban, Flipkart argued it is “a landmark moment in their (businesses) financial year” and that the company empower them with business insights that allow them to decide the best value for their own products.

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