In a written statement, Amazon said it “always kept the law” in India
Amazon has for years given preferential treatment to a small group of sellers on its platform in India, publicly misrepresented its ties to sellers and used them to circumvent increasingly strict foreign investment rules that affect e-commerce, show internal company documents reviewed by Reuters. The documents, dated from 2012 to 2019, are reported here for the first time. They provide an internal view of the cat and mouse game that Amazon has played with the government, adjusting its corporate structures each time the government imposes new restrictions designed to protect small traders.
With Amazon facing increasing scrutiny from regulators, news of the strategy detailed in the documents could deepen risks for the company in one of its key growth markets. Merchants, who are a crucial part of Prime Minister Narendra Modi’s support base, have long claimed that the Amazon platform largely benefits some big sellers and that the e-commerce giant engages in predatory prices that hurt their business .
In a written statement, Amazon said that “it has always complied with the law” in India and that “as government policies continued to evolve, we made the necessary changes consistently to ensure compliance at all times”.
Amazon also said that “it does not give preferential treatment to any seller in its market” and that “it treats all sellers in a fair, transparent and non-discriminatory manner, with each seller responsible for determining prices independently and managing their inventory.”
Here are more important findings from the special report:
* The documents reveal that the American e-commerce giant helped a small number of sellers to prosper and gave them discounted rates, using them to bypass India’s regulatory restrictions on foreign investment to protect small traders.
* About 33 Amazon sellers accounted for about a third of the value of all products sold on the company’s website in early 2019, the documents show. Two other big sellers – merchants in which Amazon had indirect stakes – accounted for about 35 percent of the platform’s sales revenue in early 2019. This meant that about 35 of the more than 400,000 Amazon sellers in India at the time responded for about two-thirds of their online sales.
* Amazon has exercised significant control over the inventory of some of the biggest sellers on Amazon.in, the documents show, although it publicly states that all sellers operate independently on their platform.
* Amazon helped Cloudtail, a seller in which it has an indirect stake, to close special deals with major technology manufacturers like Apple Inc, the documents show.
Amazon says it is helping small and medium-sized businesses to grow in India and now has more than 700,000 vendors on its platform. During a visit to India in January last year, Amazon founder Jeff Bezos announced that the company would spend $ 1 billion to bring small businesses online in the country. That would bring Amazon’s total committed investment in India to $ 6.5 billion. Amazon had about $ 10 billion in sales in India in 2019, according to Forrester Research.