Amazon.com Inc chief executive officer Jeff Bezos faced a bitter welcome during his India visit this week, as the country’s antitrust regulator initiated a formal investigation just hours before his arrival and trader bodies comprising millions of infuriated small-store owners announced demonstrations.
Bezos is in New Delhi for the Smbhav summit, an Amazon India event for small and medium-sized businesses, where he announced Amazon is to invest a fresh US$1 billion to help bring such companies online. He also committed the retail giant to exporting a total of US$10 billion of made-in-India goods by 2025.
“The 21st century is going to be the Indian century,” the Amazon founder said. “This country has something special: its dynamism. I also predict that the most important alliance in the 21st century will be between India and the United States.”
Dressed in blue jeans and a vest echoing Indian Prime Minister Narendra Modi’s favorite garment, Bezos lifted a ceremonial lamp to inaugurate the summit. A day earlier, he put out a rare tweet to publicize his visit to the Mahatma Gandhi memorial, where he wore a white tunic and a rust-colored Indian vest.
However, the small businesses that Amazon’s CEO is hoping to endear himself to are organizing in opposition. The Confederation of All India Traders announced that members of its affiliate bodies across the country would stage sit-ins and public rallies in 300 cities to raise a war cry against the world’s largest online retailer.
In a letter to Modi last week, the confederation’s secretary-general Praveen Khandelwal alleged that Amazon, much like Walmart Inc-owned Flipkart, was an “economic terrorist” who engaged in predatory pricing that deprived the government of tax revenue and “compelled the closure of thousands of small traders.”
India’s e-commerce market is projected to grow to US$150 billion by 2022, according to a 2018 report by software industry group Nasscom and consulting firm PwC India.
Competition for this rapidly expanding sector is intensifying as Asia’s richest man, Mukesh Ambani, prepares to go live with JioMart, an online shopping platform challenging Amazon and Walmart directly. The latter’s Flipkart Online Services Pvt is also delving deeper into the countryside in its pursuit of more customers.
Amazon, for its part, opened a huge office complex in the southern city of Hyderabad in September last year, underscoring its commitment to the country.
The Competition Commission of India said it would probe the deep discounts, preferential listings and exclusionary tactics that Amazon and Flipkart are alleged to have used as anti-competitive levers. India’s trader bodies have long argued that both retail giants were flouting rules by promoting sales and discounts through their favored sellers, with many of whom they have pre-existing commercial arrangements.
The regulator has ordered that the investigation be completed within two months.
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