InvestorQ : What is the complaint that Reliance Retail has filed against the global ecommerce players in India like Amazon and Wal-Mart?
Ria Jain made post

What is the complaint that Reliance Retail has filed against the global ecommerce players in India like Amazon and Wal-Mart?

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Dia Deshpande answered.
9 months ago
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Reliance Retail has informed the Indian government that global ecommerce players were deliberately using complex legal structures to bypass India’s e-commerce rules which does not permit foreign capital in inventory-based model. Of course, Amazon has denied all such allegations and has also asked the government to conduct a detailed investigation before issuing any clarification on the subject. Current rules only permit infrastructure platforms.

Reliance Retail point out that one example of such legal structures includes creating a multi-level company structure to hide the real relationship between the marketplace entity and the sellers. In other words, what Reliance is saying is that the relationship that Amazon shares with the large sellers on the Amazon platform is not of a hands off selling agent but that of a principal and subsidiary, with the seller virtually representing Amazon.

Reliance has called for greater clarity on the rules and has called on the government to issue an unambiguous clarification. One way suggested by Reliance Retail is to widen the scope of Group Company to also include affiliate and associate companies and prevent the misuse of B2B e-commerce by controlling inventory, enabling deep discounts.

It boils down to the fact that Amazon and Flipkart are able to control inventory and use their balance sheets to throw huge discounts at customers. RRVL has called for level-playing field.

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