While Singapore-based Shopee had faced allegations that its method of operations was like dominant ecommerce platforms Amazon and Flipkart, and that it was indulging in “deep discounting”, the complaint against Amazon was that the US-based company and its related parties were using unfair trade practices to conduct business on the platform.
CCI said Shopee was launched in November 2021 at a time when there were many existing players – Amazon, Flipkart, Myntra and Nykaa – and so did not possess “significant market power”.
“The Commission further notes that, though the allegation is that Shopee is following similar discounting practices as allegedly done by Amazon and Flipkart, it does not appear to the Commission that Shopee possesses significant market power, much less dominance, at this stage, more so because of the fact that it is a new entrant in a market with established players,” it said in an order published last week.
For Amazon, the Commission said that the allegations made against the company were “devoid of admissible/requisite evidence”.
With respect to Shopee, the Competition Commission of India (CCI) had received complaints from two individuals – Praveen Khadelwal and Vaibhav Mishra. Khandelwal is the president of the Confederation of Indian Traders, a traders’ lobby group, while Mishra has been described as an e-commerce consumer.
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Both complainants had alleged that Shopee offered deep discounts on various products by selling them at extremely low prices on its portal. Shopee entered India last year and services more than 100,000 orders a day, according to the complainant.
“This tactic of predatory pricing is being done with a view to affect traditional and small-scale businesses in India,” one of the complainants said.
Mishra provided certain screenshots and alleged that some of the products, such as kurtis, mugs, wallets were being sold at Rs 9.
Shopee is currently selling products at below-cost prices to drive competitors out of the market and will later recoup its losses and start charging monopoly prices, according to the complainant.
Shopee did not respond to queries. Amazon declined to comment.
Amazon faced allegations from the All India Online Vendors’ Association, a collective of 2,000 online sellers, regarding unfair trade practices, such as “deep discounting” and “platform neutrality”, as sellers who are partly owned by Amazon get unfair advantage. The allegation was against Amazon and related parties – Amazon Seller Services, Amazon Wholesale India, Amazon Retail India, Cloudtail India, Prione Business Services.
Both CAIT and All India Online Vendors Association have been strong critics of foreign e-commerce firms.
The complainant has also alleged that Amazon used the data of successful sellers on the platform to sell private label products. Amazon charges higher platform fees from independent sellers compared to related party sellers like Cloudtail, it further claimed.
Amazon is buying out Cloudtail, the largest and longest serving seller on its marketplace. There have also been top level changes at the company in India.
ET reported on March 1 that Amit Agarwal had been elevated to emerging markets head and that Manish Tiwary would take over as country manager. Agarwal will continue to head the India market.
