E-marketplaces giving preferential treatment to some: Sellers

NEW DELHI: Independent sellers on ecommerce marketplaces have alleged that the platforms give “preferential treatments” to some sellers who pop up more in product searches, a survey by the country’s competition watchdog has said.

While the Competition Commission of India (CCI) survey did not name any marketplace, analysts believe the sellers are referring to Walmart-owned Flipkart and Amazon as over the years various vendors have accused the two largest marketplaces of pushing their preferred sellers.

The marketplaces have maintained that they just operate platforms and all the sellers are third party vendors, according to the interim observations of the survey released on Friday.

Small sellers have also alleged that marketplaces sell their own private labels. The marketplaces have responded saying private brands are sold by private entities to meet high demands in certain categories.

Similarly, restaurants have accused food aggregators such as Swiggy and Zomato of promoting their cloud kitchens.

The CCI survey, conducted by Ernst & Young, covered about 170 retailers, ecommerce companies, hoteliers, restaurant operators and manufacturers.

It found that smartphones are largely sold through ecommerce and the category constitutes the largest share of all the products sold through online channels. Also, more than 20% of business of small and mid-segment hotels come through web-based travel services companies.

On food services, 78% respondent restaurants said they have an online presence —69% went online between 2016 and 2018 — and are listed on three platforms on an average. Around 28% of their revenue comes from online platforms.

Restauranteurs alleged that aggregators were non-transparent and unilaterally and arbitrarily increase commissions. They said they are compelled to use platforms’ fleet for delivery, and have restrictions on using their own fleet. They also said deep discounting is cannibalising dine-in.

Aggregators, on the other hand, claimed cloud kitchens bridge the supply-demand gap and commissions are a result of bilateral negotiations