Ads for discounts by e-tailers no violation of policy: Sources

Amid controversy over advertisements for discounts by online retailers like Amzaon and Flipkart, an official said these business propositions are to attract buyers and are not in violation of e-commerce guidelines.

"There is no problem in giving advertisements. It is part of the business. They are also putting disclaimers that these discounts are extended by vendors," sources in the Department of Industrial Policy and Promotion (DIPP) said.

Offlines players, including traders body CAIT, have been raising concerns over these advertisements alleging that they infringe the guidelines.

Sources said that sellers and brands registered on the e- marketplace platforms can communicate to the buyers only through these advertisements and the guidelines does not restricts them from offering advertisements for discounts.

According to an expert, e-commerce marketplace firms cannot offer discounts on their own as it would result in predatory pricing but they can pass on the discounts provided by the vendors and sellers registered with the platforms.

On the other hand, National Secretary General of the Confederation of All India Traders (CAIT) Praveen Khandelwal said: "This is a clear violation of the guidelines. The problem with the guidelines are that these do not contain any penal provisions. We will soon be writing to the Prime Minister and the Finance Minister on the issue".

As per DIPP guidelines, the e-commerce players providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level playing field.

Seeking to take advantage of the ongoing festival season, e-retailers like Amazon, Flipkart and Snapdeal have announced mega media blitz to attract consumers.

Snapdeal today said that the company witnessed a nine-fold increase in sales volume during the Unbox Diwali discount offer, with 37 sellers on its platform crossing Rs 1-crore turnover mark each on the first day itself.