In a written statement, Amazon said it had “always complied with the law” in India
Amazon has for years given preferential treatment to a small group of sellers on its Indian platform, misrepresenting its ties with the sellers in public and using it to circumvent increasingly difficult foreign investment rules affecting e-commerce. The documents, dated between 2012 and 2019, are reported here for the first time. It offers a look at the cat-and-mouse game that Amazon has played with the government, and adjusts its corporate structures each time the government imposes new restrictions to protect retailers.
As Amazon comes under increasing scrutiny, news of the strategy outlined in the documents could deepen the risks for the company in one of its key growth markets. Merchants, who are a key part of Prime Minister Narendra Modi’s support base, have long claimed that Amazon’s platform is largely to the advantage of some major sellers and that the e – commerce giant is engaging in predatory pricing that harms their businesses.
In a written statement, Amazon said that it “has always complied with the law in India” and that “as government policy has continued to evolve, we have consistently made the necessary changes to comply at all times.”
Amazon also stated that ‘no seller in its market gives preferential treatment, and that it’ treats all sellers in a fair, transparent and non-discriminatory manner, with each seller responsible for setting prices independently and their stock to manage. “
Here are some more important findings from the special report:
* The documents show that the US e-commerce giant helped a small number of sellers thrive and gave them discount money by using it to circumvent India’s regulatory restrictions on foreign investment to protect retailers.
* About 33 Amazon sellers accounted for about a third of the value of all goods sold on the company’s website in early 2019, according to the documents. Two other major sellers – retailers in which Amazon held indirect shares – accounted for about 35 percent of the platform’s sales in early 2019. This meant that about 35 of Amazon’s more than 400,000 sellers in India at the time made up about two-thirds. of its online sales.
* Amazon has exercised significant control over the inventory of some of the largest sellers on Amazon.
* Amazon has helped Cloudtail, a seller in which it has an indirect stake, cut special deals with major tech makers like Apple Inc., the documents show.
Amazon says it is helping small and medium-sized businesses in India grow and that it now has more than 700,000 sellers on its platform. During a visit to India in January last year, Amazon founder Jeff Bezos announced that the company would spend $ 1 billion to bring small businesses online into the country. This will increase Amazon’s total dedicated investment in India to $ 6.5 billion. According to Forrester Research, Amazon sold nearly $ 10 billion in India in 2019.