After launching its Global Store in India a couple days ago, the e-commerce giant has now listed its US arm — Amazon Export Sales LLC as a seller on its website. The foreign seller is catering to various categories such as fashion, lifestyle and electronics among others.
While many online sellers, brick and mortar retailers have expressed their apprehensions about the move, the company is denying that this violated foreign direct investment (FDI) norms. The e-commerce behemoth says that as the unit was registered overseas and all transactions would be concluded outside the country, it is not violating FDI norms.
Commenting on the decision to list the foreign seller on its platform, an Amazon India spokesperson says,
Amazon.in enables sellers (domestic and in ternational) to list their products for Indian customers. Amazon Exports Sales LLC is also a listed seller on Amazon.in… Amazon Exports Sales LLC is an exporter of products and therefore the mention of custom duties in their listings. Amazon has a high bar for compliance with laws of the land and Amazon.in is in compliance with all applicable laws.
As per the new norms from the government, e-commerce companies with overseas investment can only function as technology marketplaces that connect buyers and sellers. They are not allowed to sell anything directly themselves. Further, they also need to maintain a level playing field for all sellers and cannot influence pricing directly or indirectly.
Although the e-commerce giant is saying that it is in compliance with the law, the All India Online Vendors’ Association (AIOVA) says that when a seller is owned by the marketplace or is a group company, pricing is bound to be influenced.
Supporting the move of AIOVA, the Retailers’ Association of India (RAI), a brick and mortar grouping, has called for clarity. Kumar Rajagopalan, CEO of RAI, said,
As we understand, an ecommerce marketplace is not allowed to influence pricing. In this case when a seller is owned by Amazon, then how is it not flouting the norms? There is clarity required… and we would like government agencies to look into it.
The e-commerce giant is taking the pains to bring its foreign ‘global’ stores to India to beat its arch-rival Flipkart in this competitive marketplace scenario. Recently, both players had a fairly cut-throat competition in terms of sales figures during the mega-sale events conducted in the first week of October.