Exclusive Launches On Amazon, Flipkart Against Rules

CCI has highlighted concerns about collusion between e-commerce giants like Amazon and Flipkart with brands such as Samsung and Xiaomi for exclusive product launches. These exclusive launches violate existing e-commerce rules in several ways - Praveen Khandelwal, Secretary General, Confederation of All India Traders (CAIT), tells Bizz Buzz

Bengaluru: E-commerce giants like Amazon and Flipkart are flouting the FDI rules by enabling exclusive product launches of brands like Samsung and Xiaomi on their platforms, trade bodies and retailers said.

“The Competition Commission of India (CCI) has highlighted concerns about collusion between e-commerce giants like Amazon and Flipkart with brands such as Samsung and Xiaomi for exclusive product launches. These exclusive launches violate existing e-commerce rules in several ways,” Praveen Khandelwal, Secretary General, Confederation of All India Traders (CAIT), told Bizz Buzz.

According to the apex trade body, India’s Foreign Direct Investment (FDI) policy for e-commerce prohibits platforms from influencing prices and requires a level playing field for all sellers. Exclusive tie-ups like that of Samsung and Xiaomi lead to deep discounting and preferential treatment, which contravenes these rules by effectively allowing the platforms to influence the pricing and distribution of products, it said.

“The practice of launching products exclusively on platforms like Amazon and Flipkart, coupled with heavy discounts and cash back offers through partnerships with banks, leads to artificially lower prices, which traditional retailers can’t match. This undermines the principle of fair competition and disadvantages offline retailers,” added Khandelwal.

Recently, reports suggested that CCI has found that Amazon and Flipkart violated competition laws by favouring certain sellers, prioritizing specific listings, and offering steep discounts. CCI’s findings indicated that Samsung, Xiaomi, Motorola, Realme, and OnePlus engaged in exclusive product launches in collaboration with Amazon and Flipkart, which are anti-competitive in nature.

Industry watchers said that retailers in the rural areas are put in a disadvantageous condition due to such exclusive launches. In many parts of India, especially in small towns and rural areas, consumers are still heavily dependent on traditional retail.

Exclusive online launches mean these areas, where internet penetration or comfort with digital shopping is lower, are left behind.

“Consumers in these regions may not have access to popular products, or they might have to pay higher prices through local sellers who can’t compete with online discounts,” the CAIT’s Secretary General said.

Many also feel that such practices are leading to dominance of a few players, which can hurt the consumers in the future.

“Such launches can lead to monopolistic tendencies, where a few platforms dominate the market for certain high-demand products, reducing the scope for new or smaller players to compete. This can ultimately hurt consumers by reducing long-term competition,” said CAIT.

Earlier in a reply to the Parliament, Union Commerce Minister has said that e-commerce players can’t do exclusive product launches in their platforms.

“E-commerce marketplace entity will not mandate any seller to sell any product exclusively on its platform only,” the Minister has said in his reply.

Despite such restrictions, many brands are entering into exclusive product launch agreement with ecommerce platforms like Amazon and Flipkart. Such unfair practices are leading to loss of business and jobs for small retailers, it is said.

“The increasing reliance on e-commerce platforms for exclusive launches may further erode the cultural and economic importance of brick-and-mortar stores. Physical retail not only provides employment and contributes to local economies, but it also offers a personal touch and a sensory shopping experience that online platforms cannot replicate. The decline of physical retail could impact the overall shopping culture and social dynamics of local communities,” the industry body, CAIT said.