Amazon: Asmbhav Summit stepped up against foreign e-commerce traders

Vital points raised at the Asmbhav summit discussed the crux of the issues that were destroying the small trader.
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Several spokespeople and followers of over six lakh small Indian traders, distributors, and merchants (both off and online) came together for the unveiling of a unique event -- known as the 'Asmbhav Summit'. The conference was held in response to the opening session of Amazon's flagship event Smbhav -- which means 'Possible'.

About Smbhav

Amazon India, on Thursday, announced a $250 MM Amazon Smbhav Venture Fund (the Venture Fund) to invest in startups and entrepreneurs focusing on technology innovations in SMB digitisation, Agriculture and Healthcare.

About Asmbhav

The word 'Asmbhav' which means impossible, exhibits the belief of the sellers, saying that till the time India allows foreign traders to pose as marketplaces and platforms in the country, small-scale sellers would find it impossible to succeed.

The event was held simultaneously with Amazon's Smbhav 2021, which spoke seemingly about being a 'guide' to small and medium scale traders and partners.

What the conference discussed

The conference was held in a virtual space, owing to the ongoing COVID-19 pandemic in the country. It successfully portrayed the voices and ambitions of lakhs of small traders across India and witnessed passionate participation from participants across the industry.

A prime case raised at the conference spoke about the need for stricter regulation and penalisation for wrongs done by the foreign retailers posing as marketplaces.

A pedestal for raising the voice

As per Ashwani Mahajan of Swadeshi Jagran Manch, "Some government agencies have now become active and vigilant. ED is one while the Competition Commission of India (CCI) is also investigating and has gone to court too. My request is for the RBI to investigate FEMA violations wherever these have taken place so that the foreign platforms, if they are defaulters, can be checked and stopped".

The panellists were of the view, put forth by Mahajan when he said, "Believe me, and I say this with full responsibility, that these foreign retailers are all working illegally in India. These companies are operating in my country through deception in e-commerce, since otherwise, as per law, they can only operate under certain clearly stated restrictions. For instance, they can only run a platform, implying that these companies cannot keep any stocks, sell own label brands, or offer market discounts. Unfortunately, and to the detriment of our small sellers and even the entire Indian market, foreign retailers, under the guise of running platforms, have blatantly misused their money and influence to wield their clout and twist the regulations at will. We hope that our coming together at Asmbhav will prod the government and our institution to quick and effective action."

The vital points that came from the several deliberations go to the very crux of the issues that are destroying the small trader — who has gone mainly unnoticed and muffled so far.

The fundamental issue discussed at the conference was the absence of implementation of rules and laws due to overlooking and glitches.

Speakers also reiterated the need to urgently establish our governing system to bring errant foreign retailers under control.

To deliver the same, it stated that our institutions would have to work as mandated.

Another aspect of the discussion was the issue concerning monopoly and how CCI law and FDI laws needed re-work. Several speakers talked about their concerns at great length.

Among those, Pranav Sachdeva, Advocate on Record, Supreme Court, stated "We should not focus too much on FDI law since these e-com giants do not technically violate these. We must focus on competition law being violated and create a policy that stops retailers above a certain size from becoming sellers."

Embellishing on this, MM Sharma, Advocate, Head - Competition Law & Policy, from Vaish Associates Advocates Law, stated, "Effective enforcement of law through CCI is an absolute must now. Predatory pricing cannot be applied as a contravention since none of the players can be designated as 'dominant'-only one entity can be dominant as per competition law".

The systemic illegality of the platforms functioning as 'marketplaces' was also brought to light. According to Sharma, "There are three clear aberrations of the new digital marketplace: Self-preferencing, abuse of dominance, foreclose of data access in acquiring potential customers." Chanakya Basa, a legal expert, stated, "The need of the hour is objective dispute resolution between the platform and the aggrieved retailers and, where applicable, a deterrent penalty. In many cases, we now see the crying need for an Ombudsman also."

The matter of ill-treatment of small retailers at the hands of so-called platform owners turned marketplaces took centre-stage.

According to Abhay Raj Mishra, PRAHAR, "the small to medium sized traders have been constantly subjected to a cruel bias by the foreign retailers. It is apparent that these merchants serve no other purpose than just becoming lifeless statistics for the large platforms to claim bragging rights on reach and depth."

An All-India Online vendors Association (AIOVA) spokesperson, said "When we failed to find solutions to our issues of mistreatment and arbitrariness by the monopolistic platforms, we reached out to the government five years ago, who ignored our complaints saying we were just 0.5 per cent of retail then. Today, as per the government figures we have a seven percent share. Hope we shall be heard now."

Abir Roy of Sarvada Legal was quoted saying, "Today it is the CCI that can give relief. My recommendation is that the SEBI example can be a good one to emulate. There should be no relation between sellers and platform at all, no common employees, no holding, no equity."

The controversial topic of data was also broadly addressed. As per Parminder Singh from IT for Change, "The central issue that faces us today is data ownership. With a single entity controlling all data, power fully resides with that entity always. This has to be addressed and data must be made democratic and free."

Chief issues presented linked to loss of livelihoods through rapacious pricing and unreasonable obligations. According to Arvinder Khurana, AIMRA, "The large e-commerce portals are flouting FDI rules at every level and tying up directly with brands and offering deep discounts that none of us can match. As a result, over 40,000 mobile shops have shut down in the last two years. Portals now have 55 percent market share in mobiles whereas mobile shops have seen 60 percent loss in business."

The conference also covered opinions and comments by Vijay Gopal, a former Amazon manager. Vijay was instrumental in highlighting the objectionable practices of random legal contracts modifications between small and large foreign retailers to light. He said, "Fundamental rights are suspended in e-commerce, so to speak; anyone can be ousted, or terms changed at will without assigning any reason."

(With inputs from IANS)

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