Flipkart Is Forming Ecommerce Lobby To Fight Offline Retailers; Surprisingly, Amazon Is Not Invited!
Offline vs Online battle in India is reaching a new crescendo. As per reports coming in, in order to ‘fight’ offline biggies and various retailers’ associations which are influencing Govt.’s decision in their favor, ecommerce companies are working hard to form their own lobby and take their pitch to higher level.
Leading this initiative is Flipkart’s co-founder Sachin Bansal who actually asked founders of leading ecommerce firms to come together, and fight the battle in unity. Reportedly, he sent a personal invite to all participants.
This group of several ecommerce CEOs, founders recently met State Minister for Finance, Jayant Sinha, and discussed their problems and issues.
An unnamed person who attended this high level meeting with Minister Sinha said, “All key players are realizing the effect an association like RAI (Retailers Association of India) creates on the whole ecosystem. Most of us have our own different paths and strategies, but some issues are common to all and these could be addressed better as a group,”
Interestingly, Snapdeal was invited as a personal invite was sent to Kunal Bahl; however he couldn’t attend the meeting but provided his support for the cause. More interesting is the fact that Flipkart didn’t invite Amazon into their lobby.
Flipkart and Amazon are right now locked in a serious fight to hold dominance over the Indian ecommerce market, and even the threat from offline retailers was not enough to unite them.
Last year in November, Amazon was declared as the most visited ecommerce portal in India and in April this year, they were accepted as the most attractive employer in ecommerce. They have recently announced a fresh investment of $3 billion to dominate the market, and Flipkart considers them as arch enemy.
Why Ecommerce Unity Is Important?
As per Google’s report, there would be 175 million e-shoppers by 2020 which will collectively transact $20 billion worth of products online. Assocham has predicted that Indian ecommerce market will cross $120 billion by 2020; thereby becoming fastest growing digital market in the world.
However, offline retailers aren’t much amused by this exponential growth of Indian ecommerce, and they are attempting everything to stop their expansion. If more people are buying online, then it simply means less business for the offline players.
Google has already stated that Internet influences buying decisions, especially for real estate purchases; and this trend is simply refusing to die down.
This is the reason real estate brokers are attacking Internet startups; offline retailers are launching special campaigns to stop the growth of internet based commerce and controversy erupts when President of India launches a book exclusively online.
Influential lobbies such as Retailers Association of India demand a ‘level playing field’ from Govt. of India; Confederation of All India Traders (CAIT) demands action against ecommerce players and forces the Govt. to impose special tax on online transactions.
The fear of online entrepreneurs becomes real when Govt. actually interferes in the business model of these new age digital companies, and initiates legal action against them for violating ill-defined laws!
Influenced by the lobbying of offline retailers, States such as Uttarakhand, Uttar Pradesh , Gujarat, MP, Rajasthan and other states impose ecommerce tax on startups, thereby destroying an entire industry.
It would be interesting to observe how this new lobby of ecommerce companies in association with IAMAI, Assocham and Nasscom is able to influence Gopvt.’s viewpoints and decisions in their favor.
We will keep you updated on the battle between offline and online; because the story has just started.