Commerce and industry minister Piyush Goyal ruffled feathers by lambasting e-commerce giants and in particular, Amazon, at an event organised ironically to mark the growth of e-commerce in the country. The minister caused a stir when he said that the exponential growth of e-commerce in India could cause social disruption, is a matter of concern, and nothing to be proud of.
“The country celebrates when firms such as Amazon announce investment worth billions of dollars. However, these investments are not coming to support the Indian economy,” Goyal alleged, even as organisers and others on the podium squirmed.
Going off script, the minister tore into predatory pricing aimed at killing competition as well as social dangers caused by the unbridled delivery culture which has seen drug delivery to even children without accurate checks.
The event was organised by the think-tank Pehle India Foundation headed by former NITI Aayog vice-chairman Rajiv Kumar to release its report on the impact of e-commerce. The report noted that the growth of e-commerce in India will boost jobs and have reshaped consumer behaviour. The study noted that online shopping has come as a boon even to physical retailers, with fears of a ‘retail apocalypse’ due to the advent of online retail turning out to be grossly overrated. Instead, the study noted that even brick-and-mortar retailers could improve their businesses by adopting technology and online practices.
However, minister Goyal apparently had an alternative vision in his mind. “E-commerce has a role, but we have to think carefully what that role is,” he said, adding, “How that role can be in a more organised fashion. Is predatory pricing policy good for the country?”
The Union minister especially did not mince his words in talking about perhaps the biggest e-commerce player in the country, the American giant Amazon. Goyal called out the company’s practices in cutting prices and offering deals which he said was aimed at driving out rivals and kill competition. He suggested that Amazon’s billion-dollar investments were not a service to the country or its economy, but only to cover its losses.
The minister also questioned the legality of e-commerce platforms engaging in direct-to-consumer, pointing out how e-commerce platforms are not allowed to sell directly to consumers, but were circumventing it. “Should it not be a matter of concern for us?” he asked, pointing out how the deep discounts and other practices indulged in by big e-commerce players was hurting small businesses in the country. “How many mobile shops do you see now in the corner? And how many were around 10 years ago? Where are they now?”, he added, asking, “Will only Apple or (other) large retailers (only) sell mobile phones and their accessories now?”
With its 27 per cent growth rate, the union minister said the expansion of e-commerce could lead to significant social disruption, particularly for millions of small retailers who form the backbone of India's economy. “I don't see it as a matter of pride that half our market may become part of the e-commerce network 10 years from now -- it is a matter of concern!" Goyal thundered.
