Wednesday 30 January 2019

Offline retailers urge Members of Parliament not to extend deadline

Offline retailers urge Members of Parliament not to extend deadlineBENGALURU: As the February 1 deadline for online marketplaces to comply with the changes in FDI guidelines approaches, offline retailers are keeping up the pressure on the government, urging it to not give into any requests for an extension by Amazon and Flipkart.

All India Mobile Retailers Association (AIMRA), which counts 25,000 mobile retailers as its members, has also written to members of Lok Sabha and Rajya Sabha, accusing Amazon India and Flipkart of indulging in unethical and illegal practices. ET has a copy of the letter.

The grouping had written to the Department of Industrial Policy and Promotion(DIPP) and commerce minister Suresh Prabhu at an earlier date.

ET on January 28 reported smaller ecommerce marketplaces such as Snapdeal and ShopClues, online social commerce startups like Shop 101, and some online-only brands have come together to oppose any deadline extension for the large online marketplaces.

Changes to FDI guidelines notified by the government on December 26, 2018, restrict marketplaces such as Flipkart and Amazon from selling products from sellers in which they have an equity interest. It also disallowed marketplaces from entering into exclusive partnerships with brands.

Both Flipkart and Amazon have written to the government asking for extensions ranging from four to six months to comply with the new rules.

Smartphones account for the biggest chunk of sales on ecommerce marketplaces, with analysts estimating that around 40% of all devices sold in India now happens online. AIMRA has pegged that number higher, claiming that 56% of all mobiles sold in the country happens online.

The body claimed Flipkart and Amazon have eroded their sales by entering into exclusive partnerships with brands such as Xiaomi, OnePlus and Samsung. Moreover, AIMRA has claimed that the discounts offered by these players to incentivise buyers and grow their market share have adversely affected small offline retailers.

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