Methods to determine predatory pricing for ecommerce firms with constant changes in prices
Answers
Traders, brick-and-mortar retailers and farmer rights' bodies are mounting pressure on the government to put an end to the deep discounting and predatory pricing strategy of e-commerce firms.
While the government has made it clear it would act against deep discounting and predatory pricing, trader bodies want the authorities to bring the much-awaited e-commerce policy at the earliest and not wait for elections.
“Predatory pricing methodology needs to be checked. It has destroyed and disrupted domestic business to a great extent. To have a control on the trade, and on economy, these companies are engaged in such type of activities.
The absence of any policy mechanism is giving them leverage to play the market in their own likings. The government should immediately take necessary steps. Why to wait for elections? An e-commerce policy and a regulatory authority is need of the hour,” said Praveen Khandelwal, national secretary general, Confederation of All India Traders (CAIT).
E-commerce firms, however, claim that they are following all norms and it is the sellers who are powering or bankrolling the discounts. “
Explanation:
like a mall that offers festive sales, we are an online medium where sellers and retailers come up with discounts.
We have clear policies according to which we do not finance any discounting or push sellers to do so," said a senior vice-president of country's one of the largest e-commerce marketplaces.
The government on its part has made it clear that any new e-commerce policy will absolutely have a clause to shut down predatory pricing practised by the firms.
The draft e-commerce policy, under consideration by the government till about two months back, had proposed a sunset clause for predatory pricing policies that include 'zero payment offers', 'flash sales' and 'unlimited offers'. It had also sought to define these practices and set fixed norms for each.
The industrial policy and promotion department (DIPP) is in the process of putting together a fresh draft of the proposed policy after the last one faced heat from both companies and civil society alike. “We didn't face any major hurdle on the deep discounting clause because e-commerce companies, retailers' bodies and consumer groups agree that it is not a sustainable or healthy model of business. So, the new draft, whenever it comes, will absolutely have that clause,” a senior DIPP official said.
Hope it helped you