EVEN IN LOSSES E TAILERS ARE CELEBRATING FESTIVE SALES

On Oct 14, 2015

It can happen only in India. The loss incurring business entities are giving jaw dropping discounts and still have no regrets. Not only this though they are registering huge revenue but still running in losses every year. The story relates to e Commerce Companies Amazon, Flipkart and Snapdeal and others which are conducting Festive Sales these days offering great discounts at the cost of running the business in losses. Such a magic has failed established mathematics of Indian economy which always talks about sustainability of a business only when it earns profit.

Not only this, these Companies have received FDI in their respective business and as per Govt. policy are entitled to do only Business to Business (B2B) activities but keeping aside the law, these companies are openly selling goods to consumers just below the nose of the Government. Unfortunately, the Government has kept the eyes closed and even the Complaint filed by Confederation of All India Traders (CAIT) with Department of Industrial Policy & Promotion two days ago has not yielded any response-said Mr. B.C.Bhartia, National President & Mr. Praveen Khandelwal, Secretary General of CAIT today in a joint Press Statement.

As per reports available in public domain for the year 2012-13 flipkart registered a loss of about 340 crore which rose to Rs.719 crore in 2013-14 whereas Snapdeal was in losses to the tune of Rs.120 crore in year 2012-13 which rose to Rs.270 crore in 2013-14. Even then there is a flow of investors to these Companies.

Both Mr. Bhartia and Mr. Khandelwal said that it is a matter of great surprise that since last one year CAIT is demanding investigation into the business model of E Commerce Companies but the Government is tight lipped and no response has been received. Even for a small technical error, the Government Departments start investigations in matter of small traders but here the E-tailers are openly flouting the rules and norms and are indulging into gap funding and predatory pricing but the Government has not taken any cognizance

They informed that since Secretary, DIPP has not given any response, they have left with the option to approach Union Finance Minister and Union Commerce Minister and will demand their immediate intervention or will go to the Court of Law.