What is a Rs 5 Shopsy store against which CAIT is protesting?

The Confederation of All India Traders (CAIT) has requested Union Finance Minister Nirmala Sitharaman to probe the Rs 5 stores of Flipkart-owned Shopsy. But what is Shopsy? 

Shopsy is a social e-commerce platform launched by Flipkart in July 2021. Upon its launch, Flipkart stated that this app will enable Indians to set up their own businesses without any capital investment. Headquartered in Bangalore, Shopsy helps individuals and small businesses to resell products through social media channels like WhatsApp, Facebook, and Instagram. 

The app is available for Android users only and has managed to clock 10 million downloads on Google Play, as of December 2021. 

Shopsy users have access to a catalogue of over 15 crore products offered by Flipkart sellers. These range from fashion, beauty, mobiles, footwear, to accessories. Users of the app can share product catalogues with other customers. Shopsy users can then place an order for a particular product that their contact wants to purchase. The product will then be delivered to that contact and the user will earn a commission on the transactions. 

"Just browse through the catalog of products across categories like fashion and more. Share it with your friends, family and customers. And finally, add your profit margin, place the order and enjoy your earnings as the margin gets credited to your account," reads the app description of Shopsy on Google Play. 

In December, Shopsy added a grocery category to its platform wherein users can get a flat 5 per cent commission margin that will directly be credited to their linked bank account as well as enjoy up to 50 per cent savings.

What is Shopsy Rs 5 store? 

The Rs 5 store or Loot Store is a special deal offered by Shopsy in which certain products are available at heavily discounted prices i.e less than Rs 5. Delivery charges are also not levied on products. However, customers can use this store only once per account per month. This offer is also only available at certain times during the day. Shopsy users can also earn a commission on these transactions. 

It is these kinds of offers by Shopsy that CAIT has demanded an investigation against. 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." he claimed that Flipkart is killing small traders with predatory pricing and deep discounting tactics. He added that this isa 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. 

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