Kishore Biyani questions Flipkart's flash sales, retailer's body says it's 'anti-competitive'

Laws in this country do not allow sales below cost price, says Biyani

Sindhu Bhattacharya October 08, 2014 13:12:42 IST
Kishore Biyani questions Flipkart's flash sales, retailer's body says it's 'anti-competitive'

New Delhi - How can Myntra sell our products at such deep discounts and hurt our brands, asks Pantaloon's Kishore Biyani?

A day after Flipkart (which owns Myntra) claimed it did business worth $100 million or Rs 600 crore in 10 hours because of deep discounts, Biyani says there is case for anti-competitive action against online retailers.

Today, front page ads across several newspapers in Delhi speak of a flat 50 per cent off sale on Myntra. Other apparel websites like Jabong are sure to follow suit.

Unconfirmed reports suggest that some other brick-and-mortar retailers, who sell their brands on online platforms like Flipkart, have been speaking to each other this morning. This is specially true of retailers with well known apparel brands. They are all deeply unhappy with online discounts and may approach the Competition Commission of India against e-retailers.

Speaking to Firstbiz, Biyani said, "Laws in this country do not allow sales below cost price. This is anti-competitive. We (at Big Bazaar and other retail brands) never sell below cost price".

Though he declined to confirm if his group will approach Competition Commission of India (CCI), it is clear that the brick-and-mortar retail giants are getting together to fight the online onslaught.

One brick-and-mortar retailer doubted the Rs 600 crore figure given out by Flipkart, saying the website more likely earned just a tenth of that.

Snapdeal's Kunal Bahl claimed that he sold products worth Rs 1 crore every minute yesterday.

As part of the Big Billion Day, Flipkart was offering products across 70 categories with discounts where some were available at a tenth of their original price. The mega sale by Flipkart was matched almost product to product by rivals Snapdeal, Amazon and eBay.

Praveen Khandelwal of Confederation of All India Traders (CAIT) echoed Biyani's sentiment, saying his association has already approached the Ministry of Commerce.

"We do not understand how online retailers gave 60-70% discounts. The prices at which they sold merchandise are lower than our purchase prices. This is a clear case of predatory pricing," he said.

Khandelwal also pointed out that under contracts signed with sellers, these websites would have anyway made anywhere between 5-20 per cent margins on each product sold even under the sale period. His association now wants a law framed to govern e-retail.

Brick and mortar retailers are protesting for two reasons: for one, such mega sales hurt their businesses and are likely to become regular features now. Secondly, they feel their brands, which took years to get established, are being sold cheap and this could hurt their businesses in the long run too.

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