Major electronics companies such as LG, Videocon and Godrej are complaining about etailers selling their products at big discounts resulting in unfair marketing practices. They have blamed etailers like Flipkart, Amazon and Snapdeal for violating e-commerce regulations.

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Are eCommerce companiesfloutingdiscountrules??
Major electronicscompaniessuchasLG, VideoconandGodrej are complainingaboutetailersselling
theirproductsat bigdiscounts resultinginunfairmarketingpractices.Theyhave blamedetailerslike
Flipkart,AmazonandSnapdeal forviolatinge-commerce regulations.
Go by the Rules
The FDI policyannouncedbythe DIPPon March 29 statesthat ecommerce companiesworkona
"marketplace model"inwhich100 per centFDI is allowed.Suchcompaniesare onlyatechnological
platformproviderthatactsas a facilitatorbetweenbuyersandsellers.Theyare notallowedtoinfluence
prices,offerproductsonsale or discountandno single vendorcanaccount for more thana fourthof
total sales.
Allegationsmade by etailers
LG and Videoconhave warnedonline sellersagainstsuchoffersandevenstoppedsuppliestoa few,said
industryexecutives,asthe companiesfearthe deepdiscountsthatpulledpricesbelow costinsome
instancescouldaffecttheirbrandimage aswell ashurt salesthroughthe brick-and-mortarchannel.The
offline channel accountsfor90% of the white goodsbusiness.The manufacturerssaysonline pricesare
10-15% lowerthanthe onestheyoffertodistributorsanddealers.Offline retailersdeemthe

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ecommerce marketplaceswillcontinuesuchdeepdiscountingsince theyare aimingtoexpandmarket
share.
FEE WAIVER PROGRAMME
The All IndiaOnline VendorsAssociation,abodyof more than1,500 online sellers,saidAmazonhas
initiatedafee waiverprogramforsome sellersfocusedlargelyonconsumerelectronicssothattheyare
able to passon discountstoconsumers."The minimumfixedtransactioncostonAmazonisaround Rs
120. Above this,Amazonchargesitscommission.However,theyhave waivedtheseforselectedsellers
and are takinga nominal fee of lessthanRs20. Thisisnot onlydisruptingpricingonoffline mediumbut
alsocreatingunnatural competitioninthe sellercommunity,"saidaspokespersonforthe groupingto
ET.
Etailersrefutingthe charges
Ecommerce companieshave assuredthe governmenttheyare notbreakingpricingrulesorforeign
investmentguidelines.Majore-commerce companieshave alwaysmaintainedthe statementthatthey
have not influencedthe pricingof productsdirectlyorindirectly.All discountsadvertisedwere offered
by the sellersontheirplatform.

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The concerns expressedbythe offline retailershave beenechoedbyseveralquartersinindustryif not
all where astheyhave not beenable toyetprove the allegationsagainsttheseetailers.
What are youropinionsonfairmarketpolicies?Are the etailersmaintainingbestindustrystandardsor
are theydistortingthe norms?