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Offline Retailers Launch ‘We Will Act’ Protest For Price Undercutting By Ecommerce Sites

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I have heard this from number of my friends who run physical stores – This year they have experienced much lower footfalls from consumers, especially in the electronic and apparel segment. And many of them believe it is due to rise in ecommerce in India. People now increasingly prefer shopping online rather than going to physical stores.

And this trend will only increase…and why not, consumers buying online are getting much better deals, sometimes nearly half the price at which local offline retailer will offer you.

While this is great for consumers, have you thought how this is affecting lakhs of local offline businesses? Obviously, they now see online retailers as their biggest enemy.

So what do offline retailers do to overcome this?

These physical store owners are now getting together to protest against the undercutting of prices by online retailers. They have launched a website – We Will Act – that condemns the business practices undertaken by ecommerce sites (mind you, in very strong words). They have also written to the Competition Commission of India, complaining that their online counterparts are selling goods below cost and skirting Indian laws on foreign direct investment in retail.

We Will Act

The website wewillact.com have put up Appeals to Government of India, Political parties of India, to consumers, to manufacturers and vendors and even to Venture Capitalists who are putting millions of dollars of investment.

Sample this – Here is what “We Will Act” asks consumers to do, in their own words:

?Let’s take some small steps

We will not purchase or supply anything to these unethical online retailers. ( XKart, Ydeal, KBong..)

?Lets boycott them.

Let’s now punish them:

1- Let’s place Cash on delivery orders for Rs.40000.00 rupees items every alternate day and cancel when delivery boy comes to delivery. This will make them to lose their fat by Rs.1000.00 at least.

2- Whenever you are free call to their customer care and waste their time. This will increase their customer care expenses.

Here is what they say about online retailers:

Some online retailers in India are like BIGDE BETE of their BIG PAPA of USA. They are getting so much money for doing so much of experiment in India and kind of playing GAMBLING. Every six months they are changing their business models, spending heavily on advertisements, selling everything to everyone at much below their cost prices, running business in huge operating losses and that is adversely affecting the traditional physical retailers.

There can be possibility if some enemies of our country or terror outfits giving funding to these MONKEYS to do so much drama and make lakhs of retailers loose their piece of mind and livelihood.

Will This Protest Help?

I really don’t think this it is going to make any difference. While they have a right to be frustrated with price undercutting, it is a business model which online retailers are following with a view of garnering consumer base in long term. I don’t think anyone can object online retailers’ business practices.

Rather than doing a protest like this, they need to accept the new world order and join the flow. They have to find a way to compete and probably move their business online.

Would love to hear your thoughts on this!

  1. […] threat now. Instead of asking Government to induce ‘entry tax’ on all online goods purchased or protesting against ecommerce portals, physical retail outlets should introduce more ‘hi-tec’ innovations such as smart mirrors, […]

  2. Azhar Umar says

    A must read article on ET – How online marketplaces like Flipkart, Snapdeal, eBay are empowering small and home businesses – http://articles.economictimes.indiatimes.com/2013-10-15/news/43068552_1_marketplaces-flipkart-online

  3. Azhar Umar says

    I do not believe that not offering warranty is a solution to the problem. Instead the brands should insist and contract with e-commerce websites that they should be allowed to sell directly in a marketplace model or give e-commerce websites a list of channel partners who are authorized to sell online.

    If this approach is accepted, neither the devaluation of the product will happen nor the channel partners will lose out on market share. If the prices are controlled by the manufacturers or authorized channel partners, physical stores will be able to match the online prices when the customer requests for.

    Being in hospitality industry and my exposure to revenue management I understand the importance and have learnt how to control the prices floated in a market. In hospitality industry – Airlines as well as Hotels have a system called Best Available Rates (BAR). The brand has the full control over what price is being floated in the market and ensures that rate parity is maintained across direct selling rates, agent selling rates and online travel rates.

    However, what I do not understand is that, now Flipkart and other major e-commerce sites work on marketplace model where retailers or re sellers upload products and prices. How are small time re sellers able to sell less than cost price ?

  4. Sandesh Thakur says

    I agree with Arun….They need to find a way to stay competitive…

  5. Hari Rastogi says

    Hi,

    WWA (We Will Act) is started by group of retailers facing problems by the FOREIGN FUNDED UNETHICAL ONLINE RETAILERS. Please try to find the answers of:

    1- Unethical E-commerce companies are violating FDI regulations:
    http://www.business-standard.com/article/technology/ed-starts-fdi-probe-against-flipkart-112121200153_1.html

    2- They are running business in losses from many years to kill competition. Some day in future when they will want to make profit they will definitely increase prices. Here is the detail of one e-commerce company making Rs.50 crore/month losses. Can small retailers run in losses? Is this not unethical? where is the the innovation in selling in losses ?
    http://techcircle.vccircle.com/2013/02/06/flipkart-cfo-karandeep-singh-quits-after-just-over-a-year/

    3-Unethical funded e-commerce companies delivering JUNK:
    http://therodinhoods.com/forum/topics/flipkart-sent-me-junk-in-the-name-of-a-nikon-d800-1

    4- They are also cheating customers and ignoring customer complains:
    http://www.thinkdigit.com/Internet/Flipkart-screwed-me-over-Heres-how-they_17224.html
    http://www.complaintboard.in/complaints-reviews/snapdeal-l115484.html

    5- Lie of being a MARKETPLACE: we can share the contacts of purchase managers of these unethical etailers.

    6- The FINAL POINT: We are doing everything under the law of the land. We are filing case in CCI ( Competition Commission of India) and asking there unethical etailers to come and reply how can they sell the books at a price which is below the publisher costings.

    Hari Rastogi
    Activist WWA (We Will Act)
    http://www.wewillact.com

  6. Srinivasan R says

    Funny to see their double standards. They talk about indian small businesses and ethics, but their website is built and hosted by Godaddy which is notorious for its unethical activities (remember SOPA? remember their CEO killing an elephant for fun?)

    Now why didn’t they pay a small indian web developer to build and host their website? Because he would ask for few thousands of rupees more for designing and hosting? Whereas godaddy gives you a convenient way to instantly design decent looking website and start hosting them in a day. All without moving their butt off the chairs.

    When things are convenient for them, they embrace online big companies and use its services. When things are bad for their business, E-commerce companies are bad.

    1. Arun Prabhudesai says

      Haha… Good point Srinivasan…Like I said, I do not have much sympathy for them…they need to upgrade themselves…rather than cry foul!

      1. Hari Rastogi says

        Dear Arun,
        The unethical funded online retailers are running loss making businesses from many years. Do you want the small retailers to upgrade themselves to run loss making businesses.
        These unethical online retailers are portrait as winner and innovator but actually they are looser ( having huge losses) and having no innovation. What ever is someone business model but it should never be selling below cost price which they are doing.

  7. Rakesh Ghumatkar says

    you fooled everyone with giveaway!!! no one got iPhone…. fake!!

    1. Arun Prabhudesai says

      My dear Rakesh… If you have followed my Twitter and FB messages.. you will know the reality.. There is no question of fooling… The Giveaway winners will be announced in 7 days… Wait for it!

    2. Kunal Gautam says

      Well there is saying in a Hindi song, “aap karo toh leela, hum kare toh character dheela”

      1. Arun Prabhudesai says

        @kunal good one!

  8. Rakesh Ghumatkar says

    Why should I be concerned as a consumer about this? I will take an example of job sites as I am in the recruitment business. Job sites are supposed to wipe out recruitment agencies and it did affect the business but now agencies are big business for Jobsites!

    We need to take service from job sites and same time compete with them for the same clients. How you evolve your business with the changing business environment is the test of a true businessman.

    Should we start a campaign to ban Jobsites as it is affecting our business and profit?

    Our clients do not care about the us as they are getting cheap service from jobsites but they come to us for different need.

    1. Arun Prabhudesai says

      Absolutely agree with you Rakesh…and as I said in the article, they need to accept the changes happening in the Industry and need to find a way to stay competitive… Thats the name of the games. Spending energy protesting like this is sheer waste of time!

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