Exactly a week before its Great Indian Festival kicks off, Amazon has sounded the bugle in the battle for the Indian consumer. The e-commerce giant has announced deep discounts across various categories of products, triggering an immediate reaction from offline retailers who fear loss of business due to the “predatory pricing” practices of e-ecommerce giants. In a conversation with , the Jeff Bezos-owned company said it will give discounts of up to 40 percent on mobile phones and accessories, and laptops.
Discounts on top television brands will go as high as 65 percent while those on washing machines, refrigerators and air-conditioners will higher still at a whopping 75 percent. As part of its festive discount scheme, 5G-enabled handsets will be offered at price points as low at Rs 8,999. A minimum of 50 percent off will be offered on mattresses and furniture and 40 percent on home appliances and cookware.
As part of its offers on fashion and beauty products, Amazon will have a discount of up to 80 percent. Price cuts of up to 50 percent will also be available on premium watches and up to 40 percent on luxury fragrances. Amazon will also for the first time introduce Korean skin care products to its customers in India.
Amazon’s artificial intelligence bot ‘Rufus’ has been tuned to help customers with shopping navigation. The offers have been panned by offline retailers who claim they do not have the ability to match the deep discounts being offered by Amazon, Flipkart and other e-commerce sites. Commerce and Industry Minister Piyush Goyal recently concurred with this view, accusing Amazon of “predatory pricing”.
The sharp criticism followed news that Amazon’s parent company was investing another $1-billion in its India operations to compensate for huge losses. “I don’t see it as a matter of pride. It is a huge concern,” Goyal said about the massive infusion of funds.
Expressing concern over the impact on the very survival of mom-and-pop stores, the minister had raised the possibility of half of India's market becoming part of the ecommerce network in the next decade. The commerce minister had also expressed concern over consumers increasingly preferring to buy online. "We will end up becoming a country of couch potatoes - watching OTT and having food at home every day," he said at the launch of a report on the impact of e-commerce on employment and consumer welfare in August.
However, a day later, Piyush Goyal had softened his stance conceding the e-commerce had tremendous benefits of convenience and speed as well as giving the consumer the benefit of home comfort. Reacting to the Amazon announcement, BJP leader and Lok Sabha MP, Praveen Khandelwal, Secretary General Emeritus, Confederation of All India Traders, India’s largest body of traders, said, “it is a matter of grave concern that e-commerce companies like Amazon are intent on undermining the retail trade ecosystem of our country”. “The announcements of excessive discounts during festive season sales clearly demonstrate a blatant disregard for laws and regulations.
The recently released investigation report by the Competition Commission of India exposes the modus operandi and unethical business practices of these e-commerce giants. Unfortunately, many brands are complicit in this misconduct, along with various banks that support these companies by offering exclusive discounts and cashbacks on their e-commerce platforms” Khandelwal said. “While these practices may seem aimed at attracting consumers, they flagrantly violate the rules governing fair trade and pricing.
Excessive discounting not only distorts market competition but also creates an uneven playing field, particularly disadvantaging smaller retailers and businesses that cannot afford to match such steep discounts. It is imperative that the government takes immediate action against these companies like Amazon, including suspending their festival sales, to restore fairness and protect the interests of the retail sector”, he added. The festive period beginning on October 3 and ending on November 3 this year, is a high-point for wholesalers and retailers in the country.
As per estimates, this one month contributes anywhere between 25-30 percent of the annual sales..
