Offline retailers should get a level playing field with their online counterparts and this includes looking into issues of predatory pricing across different channels, said BS Nagesh, Chairman, Retailers Association of India (RAI).
This comes at a time when off-line retailers that include the smaller players and kirana stores are unhappy with the deep discounting being offered by e-tailers like Amazon or Flipkart. The offline retailers have claimed that their business has been hit by the deep discounts and predatory pricing offered by e-tailers.
According to Nagesh, who is also the Chairman and Non Executive Director of Shoppers Stop, a level playing field should include taking care of capital requirements; and also looking into issues of predatory pricing.
Not sustainable
“We are not calling for a law or a ceiling on minimum price that can be charged. But there is a need for a level playing field between offline retailers and e-tailers,” he told reporters on the sidelines of a retail summit here. Predatory pricing or deep discounting is not sustainable in the long term. And the huge losses by some e-tailers in India are proof that such deep-discounting models have not been a success. Retailers including kirana stores will have to embrace technology and he is hopeful of nearly 10-15 per cent of them connecting with consumers via online over a 5-10 year period.
India is estimated to have 12-15 million small and traditional retailers. Of these, 8-10 million are kirana stores.
According to Nagesh, consumer sentiments continue to be weak and demand remains depressed. And the Government sops and measures have mostly been concentrating on the supply side.