CAIT seeks investigation against 16 e-commerce firms

March 3, 2020 written by

The Confederation of All India Traders (CAIT) has appealed to the government, seeking and investigation into the business models of 16 e-commerce companies such as Flipkart, Amazon, Zomato, Swiggy, etc.

CAIT has drafted a letter to Commerce Minister Piyush Goyal in which they have alleged that the common phenomenon in these e-commerce companies of incurring huge yearly losses and earning revenues is not a healthy business practice.

Praveen Khandelwal, National Secretary General of CAIT said, “Not only therie business models but their respective foreign investments and its disbursal, aspect of avoidance of GST & Income Tax revenue and probabilities of burning cash by them should also be investigated.”

The letter also consisted of a list of 16 companies namely, Amazon, Flipkart, Paytm, Oyo, Big Basket, Grofers, Zomato, Swiggy, Ola, Delhivery, Lenskart, Pepperfry, Rivigo, Make My Trip, PhonePay and Medlife along with their annual revenue versus loss figures.

“If e-commerce is a loss business then the government should seriously think about ending the e-commerce business in India or take such steps to remove the distortions of the e-commerce business,” added Khandelwal.

Supporting the traders allegations, Commerce and Industry Minister Piyush Goyal said that Amazon was not doing India any favours a day after the company’s CEO Jeff Bezos pledged to invest an additional $1 billion in the country, adding that this was probably on account of a need to fund losses.

Goyal further added, “How can a market place make such a big loss unless they are indulging in predatory pricing or some unfair trade practices? These are real questions which will need answers.”

“They are investing money over the last few years also in warehousing and certain other activities, which is welcome, it is good, but if they are bringing in money largely to finance losses and those losses in an e-commerce marketplace model, a fair marketplace model in a turnover of $10 billion, if you are going to have a loss of a billion-billion and half dollars it certainly raises questions, where the loss came from,” adds Goyal.

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