CAIT urges FM Sitharaman to probe Rs 5 Flipkart, Shopsy stores  

Industry body Confederation of All India Traders (CAIT) has urged Union Finance Minister Nirmala Sitharaman to investigate the Rs 1, Rs 5 and Rs 9 stores of Walmart-backed Flipkart and Shopsy. The development was confirmed by CAIT Secretary General Praveen Khandelwal in a tweet.

Khandelwal tweeted, “CAIT also requested FM Smt Nirmala Sitharaman for investigation into Rs 5 stores of Shopsy by Flipkart. Flipkart killing small traders with predatory pricing and deep discounting tactics. Blatant violation of FDI laws as well.”

CAIT also raised issues such as the lack of a level-playing field for small traders with Rs 5 stores by e-commerce firms like Flipkart and Shopsy. “How is a small trader expected to compete with such loss making Rs 1/Rs 5 stores? How can there ever be a level playing field for small traders if foreign owned e-commerce companies are allowed to get away with such blatant disregard for laws of this country,” the CAIT letter to the finance minister read.

The industry body further stated in its letter, “The current laws clearly preclude such companies from deep discounting practices, however such companies claim that these discounts are actually funded by their suppliers and not by the platform. But which supplier, except for their own inventory held companies, would fund such loss-making endeavours?”

Meanwhile, CAIT had also written to state authorities in March alleging that Shopee’s operations in India was illegal since the Chinese company Tencent Holdings has a stake in Sea. It claimed that the Shopee did not have prior approval from the Indian government before launching its services in India.

CAIT said in a letter, “Sea Holdings has significant ownership (almost 25 per cent) by Tencent (a known Chinese investment firm). Also, the founder of Sea, Forrest Li, is originally Chinese, but became a naturalized Singaporean only a few years back. Sea uses Tencent Cloud to store [its] data. Also, Sea’s gaming subsidiary, Garena, licenses most games from Tencent, leading to huge royalties and the investment, [and] ensures that there is significant control and access to data.”