Digbijay.Mishra@timesgroup.com
Bengaluru: Amazon founder and CEO Jeff Bezos can’t “guarantee” if the e-tailer has not used third-party seller data to aid its private label business, even though it has a policy against the practice, he said at a US Congressional hearing on Wednesday. While Bezos’s comments were about his US business, similar concerns have been raised in India by third-party sellers and smaller offline traders.
In fact, the Indian government has asked online retailers not to indulge in anti-competitive practices and recently mentioned ‘inclusive’ growth in its draft e-commerce policy, indicating offline traders should not get hit by the growth of e-commerce.
“We have a policy against using seller-specific data to aid our private label business. But I can’t guarantee you that policy has never been violated,” Bezos, the richest man in the world, said. He was speaking during the US Congress hearing on ‘Big Tech’ and anti-competition, where the CEOs of Google, Facebook and Apple also testified. According to Bezos, the company is investigating the matter, which was first reported by the Wall Street Journal.
In India too, e-commerce players have been pushing their private labels, which sellers and industry executives say are often made cheaper than other brands. This makes it harder for independent sellers to compete with those prices. Overall, in-house labels’ contribution to total sales ranges from high single digits to early double digits.
For example, Amazon India’s in-house labels include Solimo, Symbol and Presto, while Flipkart’s own brands are SmartBuy and MarQ. In India, there is additional competition from sellers backed by or closely working with e-commerce platforms, said Mohit Anand, an online seller. Entities like Cloudtail, Appario and TechConnect are some of the largest sellers on Amazon India and Walmart-owned Flipkart. Both these e-tailers maintain their policies are not biased against third-party sellers and don’t favour their own brands.
“Rules are meant only for sellers, while the platforms exploit those rules for anti-competitive practices. Reforms are the need of the hour in our industry, and we can’t keep depending on self-regulation. Amazon India, as well as Flipkart, are openly indulging in wilful and systemic exploitation of sellers selling on the platform. Our government has remained silent on this issue,” said a spokesperson of Aiova, a group of small sellers.
“Sellers are forced with no option, as someone said during the hearing (in the US). In India, we don’t have any other option apart from selling to the ‘alpha-sellers’, or preferred sellers, who move most e-commerce orders,” added Anand.