Minimum Operating Price to end ‘price war’; uniform discounts for online, offline trade, suggests CAIT

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Published: November 17, 2019 4:30:08 PM

In the letter to Piyush Goyal, CAIT said that there should be a uniform policy of discounting by brands for online as well as offline trade. For instance, the cashback given by banks on credit cards should also be applicable for offline purchase.

festive sales, festive sales online, festival sales, heavy discounts, online Diwali sales, Amazon, Flipkart, Myntra, mobile phones, Apple iPhone, flash sales, Amazon Prime, Flipkart Plus, Fashion & Clothing, Electronic AppliancesCAIT said no product below the MOP should be sold in the market

Traders’ body Confederation of All India Traders (CAIT) in a letter to commerce minister Piyush Goyal on Sunday suggested introduction of ‘Minimum Operating Price’ (MOP) that includes landed price, operational cost, and ‘reasonable’ profit margin even as no product below the MOP should be sold in the market to end ‘price war’ waged by e-commerce companies particularly Amazon and Flipkart, according to CAIT. “It is the responsibility of the brands to advise their buyers to sell products at MOP to maintain the market hygiene keeping in mind that retailer should earn at least minimum margin to cover his operational cost and earn very thin margin,” the letter read.

CAIT claimed that by offering products to e-commerce companies at a lower price than their distributors and retailers in the supply chain along with providing online exclusive cashback schemes, brands and banks respectively along with e-commerce companies indulging in predatory pricing and deep discounting are involved in a nexus to “lower down the prices than the actual market value and causing high level of GST and other revenue loss to the Government.”

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In the letter to Piyush Goyal, CAIT said that there should be a uniform policy of discounting by brands for online as well as offline trade. For instance, the cashback given by banks on credit cards should also be applicable for offline purchase while any upgrade or buyback offer by brands should be the same for online and offline businesses. The body sought setting up a regulatory authority to monitor all trade verticals including small retail, big retail, e-commerce and direct selling. Also, the cash on delivery (COD) route for payments in e-commerce should be suspended.

The body, which represents over 7 crore small businesses in India, has already launched an all-out offensive against Amazon and Flipkart involving two-month of massive campaigns and protests across India. The national campaign from November 13, 2019, till January 10, 2020, will allegedly see participation from more than 40,000 trade associations for “upholding the law of the land” and to “not let any other East India Company emerge in the Country at any cost,” it said. CAIT had also sought Prime Minister Narendra Modi’s intervention against violation of FDI policy by the two e-commerce companies leading to the uneven level playing field for the traditional, offline retailers and traders.

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