Shopping on Amazon, Myntra, others to get costlier; Govt to review discounting policy

Shopping through online portals like Amazon, Flipkart and Myntra would now be costlier as the Central government is planning some major amendments in e-commerce policy of the country.

Online retailers offer discounts/ cashback offers to lure customers and boost their sales. (Image: AFP)

New Delhi: Shopping through online portals like Amazon, Flipkart and Myntra would now be costlier as the Central government is planning some major amendments in e-commerce policy of the country. In a recent report by news agency PTI, the commerce and industry ministry is planning to put a check on deep discount offers given by e-commerce firms to drive sales. Major e-tail giants, over the past, have adopted deep discounts and cashback offers to lure customers and boost their sales, which highly affects the business model of tradition brick-and-mortar retails. These offline retailers, on several occasions, have complained about the huge discounts offered by e-commerce majors on the back of massive investment they raise in order to fund their losses. The much debated and hotbed e-commerce policy draft is reportedly scheduled to be reviewed by the Commerce and Industry minister Suresh Prabhu this week. During this review meeting, measures to protect offline retailers against the deep discounting policy of e-commerce companies will also be discussed. According to the report, the e-commerce policy draft is likely to propose restrictions on deep discounting policy and pricing strategy used by online retailers including Amazon, Flipkart, Paytm and others. “We have recently met officials of the ministry, who are making the new e-commerce policy. We have urged to put certain clauses to check e-commerce firms giving huge discounts and freebies as it is damaging the trade fabric of the country,” Prabhu said in Lok Sabha on Monday. Prabhu also added that e-tailers are giving discounts for the last four-five years and these were seriously damaging small retailers. Reportedly, trade bodies such as Confederation of All India Traders (CAIT) and All India Online Vendors Association have suggested to commerce and finance ministries to review the massive discounting policy that has led to predatory pricing by online retailers. In September this year, the government appointed a group of secretaries to overview the concerns pertaining to the draft e-commerce policy and issues raised by various trade organisations. The group of secretaries was headed by Department of Industrial Policy and Promotions (DIPP) secretary Ramesh Abhishek.