The government is probing Walmart-owned Flipkart and Amazon over the alleged predatory pricing, commerce minister Piyush Goyal said on Thursday. Speaking to reporters in Mumbai, Piyush Goyal said detailed questionnaires have been sent to these companies and their response is awaited.
Stating that e-commerce companies have no right to sell products at discounts that will result in retail sector incurring major loss, Piyush Goyal said these platforms are only allowed to connect potential sellers and buyers.
Warning of stringent action as per the law for any violation, he said detailed questionnaires have been sent to these companies and their response is awaited.
According to media reports, the e-commerce majors have grossed up over USD 3 billion in gross merchandise value during the festive sales held over the past fortnight, which typically see over half of their annual sales.
“E-commerce companies have no right to offer discounts or adopt predatory prices. Selling products cheaper and resulting the retail sector to incur losses is not allowed,” Piyush Goyal told reporters.
The matter comes after the Confederation of All India Traders had written to the Ministry seeking an audit into the business model of all e-commerce firms and the foreign-owned Amazon and Flipkart in particular. The letter had asked the government to verify Amazon and Flipkart’s claims that individual brands are offering discounts and not them.
Piyush Goyal, who also holds the Railways portfolio, refuted rumours that the Railways might exit its ticketing arm IRCTC which had a stellar stock market debut earlier this week following a hugely successful IPO. Piyush Goyal said the government has no plan to fully sell IRCTC.