For the sake of its MSMEs, India must step up vigil on Amazon

India’s online-sellers can, going forward, play a pivotal role in the growth and development of a strong retail ecosystem in the country.

They can offer a range of products at attractive prices to customers, create more well-paying jobs, contribute to the overall development of the economy, and, also, lend momentum to the creation of an Aatmanirbhar Bharat (self-reliant India).

It is only fitting, therefore, that these prospective nation-builders are extended every possible support to ensure that they can achieve their goals. One of the best ways to do that could probably be through authorities here probing deeper into whether Amazon’s e-commerce platform — whose way of functioning is increasingly being questioned by various merchants worldwide — is providing a level-playing field to the numerous micro, small, and medium enterprises (MSMEs) in India that use it to reach out to likely customers.

Stepping up vigil on Amazon’s business practices would ensure that local MSMEs — many of whom often lack resources to engage top lawyers in the event of a dispute — are not placed at a potential disadvantage vis-à-vis their bigger competitors when they opt for the e-commerce marketplace operated by the Seattle-based company. This includes the way Amazon implements its suspension policies for sellers.

Smaller outfits can concentrate much better on their businesses if they do not have to constantly worry about whether the American giant that controls the gateway through which items are bought and sold is treating them right. Any apprehensions on this score could have huge implications for the growth of these companies.

Authorities continuing to ask Amazon tough questions — particularly on the mechanisms that this technology behemoth has put in place to ensure that it does not end up competing with the various merchants on its platform — could prove a tremendous confidence-booster to MSMEs, especially during these turbulent times.

The greater involvement of the authorities in seeing to it that the online retail market is not apparently tilted towards only benefitting select sellers could, moreover, prompt all operators of e-commerce platforms, including Amazon, to quickly fix any deficiencies in their operating models. This, in turn, could benefit customers, with better-quality products and deals being offered.

For reasons hard to fathom, a notion has somehow been allowed to gain ground in a few quarters that small retailers may not get far if Amazon is not in the frame. This has led to a sort of limited halo effect developing around Amazon which is unfortunate as much of the US company’s growth in India is actually attributable to a general improvement in the overall ecosystem for business following the thrust accorded on bettering the country’s ranking on the ease of doing business index.

As a commercial enterprise, Amazon is here in India purely because it makes business sense for the company to do so. India, with its over 1.3 billion people (accounting for around 17 percent of the total global population), is a large market so far as it is concerned and thus Amazon’s indispensability is overstated.

Further, nobody, except Amazon itself, can answer how long the company’s interest in India would continue to remain at present levels considering that it has never publicly spelt out the volume of business it is expecting from here and the time-frame being looked at for achieving the targeted revenues. Besides, only the company knows what it would do if its India play does not go as envisaged and how that would impact fresh investments in India.

India’s retail sector, in fact, would be much better off if the heavy lifting in this arena is undertaken by companies having deep roots in this country because for these enterprises India would always be more than just a market.

Sumali Moitra is a current affairs commentator. Twitter: @sumalimoitra. Views are personal.