Discounts By Swiggy, Meesho, Shopee Can Be Investigated By Govt: But Why?

Discounts By Swiggy, Meesho, Shopee Can Be Investigated By Govt: But Why?
Discounts By Swiggy, Meesho, Shopee Can Be Investigated By Govt: But Why?

An investigation into the business practices of internet companies like Shopee, Meesho, and Swiggy’s Instamart has been demanded by the Council for International Economic Understanding (CIEU). 

The CIEU is a think tank that consists of Union IT and railways minister Ashwini Vaishnav and chairman of the Fifteenth Finance Commission N.K. Singh as its governing board members.

Think Tank Demands Investigation Against Meesho, Swiggy Instamart

The think tank has penned a letter to Piyush Goyal, Minister of Commerce & Industry, Consumer Affairs & Food & Public Distribution and Textiles to look into the companies.

The letter says, “There is evidence of many of the foreign-funded e-commerce players like Meesho, Shopee and others indulging in deep discounting at their respective marketplaces and asking sellers to drop their product prices. This reflects not only influencing pricing but also funding discounts.”

They have accused the company of indulging in anti-consumer activities; however, details haven’t been included.

The council has stated that if Meesho, Shopee, Swiggy Instamart do not follow the Rules on Metrology and make sure that customers aren’t cheated. The council has asked that any kind of non-adherence must be dealt with with the harshest penalization so that it will be a good example for the future of these non-law-abiding companies.

CAIT Asks For Action Against Shopee

The Confederation of All India Traders (CAIT) had also approached finance minister Nirmala Sitharaman and asked that action be taken against Shopee. As per CAIT, Shopee is violating norms as it has entered India without the approval of the government approval despite having a Chinese investor. 

Meesho also was under fire last month for announcing a price drop from its end to its sellers ahead of a sale. Meesho is an Indian-origin social commerce platform that enables small businesses and individuals to start their online stores via social channels such as WhatsApp, Facebook and Instagram. 

The sellers were told, “Since Meesho is contributing to the price drop, we expect a similar price drop from your end too.” As per reports, e-commerce companies are banned from offering discounts by the Indian regulation.

Meesho is one of the companies to raise the top five equity deals in the third quarter ($570 million).

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