'Matter of concern': Commerce Minister Piyush Goyal slams 'predatory pricing' by e-commerce giants
New Delhi: The “predatory pricing” by big e-commerce players is a matter of concern and may cause employment loss in traditional retail, according to Commerce and Industry Minister Piyush Goyal on Wednesday.
He admitted the importance of e-commerce but stressed the need to "carefully consider" its role in a "more structured" approach, considering its advantages and disadvantages, reported Business Standard.
“Are predatory pricing policies good for the country?” Goyal said at the launch of a report called 'Net Impact of E-Commerce on Employment and Consumer Welfare in India'.
Goyal slammed the investment strategies of e-commerce giants.
He pointed out that these companies are reporting financial losses. However, they are still making large payments to professionals and high-ranking lawyers, which might be a factor in those losses.
“When Amazon says we are going to invest a billion dollars in India, we all celebrate (but) we forget the underlying story that billion dollars is not coming in for any great service or any great investment to support the Indian economy. They made a billion dollars loss in their balance sheet that year. They have to fill in that loss," he was quoted as saying by Business Standard .
“And how did that loss get caused? They paid Rs 1,000 crore to professionals. Unless you're paying all the top lawyers to block them so that nobody can fight a case against them…If you make Rs 6,000 crore loss in one year, does that not smell of predatory pricing to any of you? What did that loss come on? They are up to all the e-commerce platforms. They are not allowed to do B2C,” said Goyal, referring to business to commerce.
A report by Pahle India Foundation highlights that e-commerce plays a key role in job creation. Online vendors employ 54 percent more workers, including nearly double the number of female employees, compared to traditional businesses. The report also notes that the rise of e-commerce has not adversely affected traditional retail. Fewer than 20 percent of offline vendors reported store closures in their vicinity since 2020, a year marked by a surge in e-commerce. Amid this surge, physical retail continues to expand and flourish.
Goyal differed with the report, saying that policies are required to protect local businesses and guarantee fair competition in e-commerce. The government must examine the effect of e-commerce on jobs and local businesses.
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