Recently a group of retailers, with most hailing from the tech city Bangalore, has written to the Competition Commission of India complaining that their online counterparts are selling goods below cost and skirting Indian laws on foreign direct investment in retail.
Hari Rastogi who is among this group of retailers has even started the protest movement via wewillact.com. Through the website, he is also looking for support of various other retailers who are facing this stiff situation created by online retailers in the country.
“We have a simple mission: to protect the “RIGHT TO SURVIVE AND GROW” for all level and section of people. We do not oppose the online retail format or any legal business format but we strongly oppose the unethical business practices of 2-3 big online retailers who are selling in losses to capture the market. For these big online retailers and their investors it is just GAMBLING but for millions of poor retailers it’s a matter of their BREAD AND BUTTER,” says the website.
The website gives details of more than a score retailers in Bangalore, and claims support of “1,000+” retailers who are seeking to protect their “right to survive and grow”.
In a letter to CCI, Hari has even questioned the legality of operations by foreign-funded online retailers.
They have also pointed out that some online retailers are using their money power to sell products at below cost price to lure users and killing the whole market using Foreign VC money.
If we look at matured markets like USA, the eCommerce is only 5% online sales and 95% is offline physical retail stores. In India the e-tailing is only 0.01% and most of that is travel. And when online retailers sell at a heavy discounted price (As of now below cost price.) it affects the entire business channel of the physical retailers which is 99.99% of the total retail.
But we should not avoid the business model of a marketplace, which provides offline retailers a platform to reach the online shopping customers.
“eCommerce marketplace gives small retailers an opportunity to market both in India and overseas. “Being a marketplace, small retailers are constantly in touch with us. This is an inclusive business model which benefits not only customers but sellers/retailers as well,” said Sachin Bansal to TOI.
As a part of this protest they have also written to VCs and online retailers, and have also asked the Government and political outfits to act.
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