Just at a time when Prime Minister Mr Modi is speaking of Digital India and promotion of E Commerce, vested interests have raised their ugly head in attacking the E Commerce industry.
Just as the success of Amazon as a book retailer shook up the industry more than 15 years ago, the Big Billion day sale of October 6th, successfully conducted by Flipkart has shaken up the Brick and Mortar Retail industry. The sale is reported to have achieved a massive Rs 600 crore sale in just 10 hours. No doubt there were issues of early sell out of discounted products and disappointment to many. But at the end of the day, Flipkart managed to create a record breaking sale.
Initial objections came from physical society retailers who felt that their right to fleece the consumers was usurped by this new entrant. Objections were raised on the heavy discounts offered.
While it is natural for business competitors to raise objection, the news that the Enforcement Directorate has started an enquiry raises doubts whether the distraught retailers have used their dirty influence on the system to harass the online retailer.
In the past there have been instances of heavy discounts on Diwali or New Year sales by offline retailers. There have been massive rush and law and order problems in some such sales. At that time there does not seem to have been any action by ED. It is surprising that regulators are now seeing some foreign exchange violation and possible violation of multi-brand retailing regulation etc.
It is possible that ED may fish out some irregularity and justify their stand in due course. But the damage they will do and what they might have already done to E Business in India is enormous. Now Snapdeal in which Tatas have an interest as well as Amazon and others will have to re think on the future strategies of E Marketing in India.
I hope Mrs Mrs Nirmala Seetharaman and Mr Modi will look into the issue and nip this motivated action of offline retailers in the bud.