Amazon, Snapdeal and Flipkart are being very cautious in India

By | November 26, 2014
E-Commerce


There is no provision to buy anything directly from Amazon.com in India. The government barred companies that have taken foreign investment from acting as retailers online in order to protect the local merchants. That is the reason why Amazon India functions as an online market, more like EBay and Alibaba. So do the country’s other industry leaders, Flipkart and Snapdeal, India’s other industry leaders are doing the same. This is because of the fact that despite being homegrown companies, they have received foreign capital.



However, small Indian retailers are still complaining that Amazon, Flipkart, and Snapdeal can exercise a level of control over products that breaks the law by limiting choices and organizing flash sales, often compensating chosen merchants who agree to slash prices. For certain products the sites feature items from just a few retailers. According to the Confederation of All India Traders, the marketplace model “is just a mask.”



E-Commerce



The Indian Finance Ministry is reviewing the findings of lengthy investigations into whether the three e-commerce companies violated rules against foreign investment. Flipkart said in an e-mailed statement that it “operates as a marketplace.” Similarly, Snapdeal stated that “the right to pricing and product solely lies with these sellers, and we have no role to play.” Amazon declined to comment, but in a filing last month with the U.S. Securities and Exchange Commission, Amazon said it faces “substantial uncertainties” regarding its Indian operation. It also said that if the government found Amazon India in violation of “existing or future” laws, it “could be subject to fines and other financial penalties, have licenses revoked, or be forced to shut down entirely.”