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CAIT moves CCI against 'Chinese' firm Shopee for hurting Indian SMEs
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SME Times News Bureau | 28 Jan, 2022
The Confederation of All India Traders (CAIT) has moved to the
Competition Commission of India (CCI) against 'Chinese' e-commerce firm
Shopee, claiming that the firm allegedly indulged in predatory pricing
and deep discounting tactics and violated the Competition Act.
In
a petition submitted with the CCI, CAIT Chairman Praveen Khandelwal
said that Shopee is offering hefty discounts on various products by
selling them at an extremely low price, thereby hampering other
competitors and adversely impacting the Indian marketplace.
"Such
predatory pricing is being done with a calculated view to eliminate the
traditional and small scale businesses in the country. Thus, Shopee is
conducting its business in India in violation of provisions of the
Competition Act, 2002," Khandelwal said late on Thursday.
Shopee
offers products on its website at Re 1, Rs 9, Rs 49 etc and CAIT alleged
that this is nothing but a deliberate reduction in the prices of
products or services to nonsensical and loss-making levels in the
short-term, with "a view to undercut and eliminate small businesses".
In
a statement, Shopee (that says it is a Singaporean company), stated
that it is compliant with local laws and regulations in every country in
which it operates.
"We share CAIT's commitment to supporting and
empowering India's SMEs, and already serve thousands of local small
businesses around the country who are connecting with consumers and
growing their online businesses on our marketplace," the company added.
In
an earlier letter addressed to Finance Minister Nirmala Sitharaman,
Commerce Minister Piyush Goyal and the CCI in December, CAIT had
highlighted that Shopee had entered into India under complex structures
to hoodwink the government.
In that letter, CAIT had said that
Shopee violated the foreign direct investment (FDI) policy of 2020,
which mandates prior Union government approval in case "any investment
is made by an entity of a country sharing land border with India, or
where the beneficial owner of an investment in India is situated in a
land bordering country".
The amended policy was launched in April 2020 amid fears over Chinese takeover of Indian firms.
Khandelwal
said that SEA Holdings (the holding company of Shopee) has significant
ownership (almost 25 per cent) by Tencent e a known Chinese investment
firm.
Also, the founder of SEA, Forrest Li, is originally Chinese, but became a naturalised Singaporean only a few years back.
Earlier
this month, Shopee, which claims it is of Singaporean origin, was hit
by an FIR filed by a customer in Lucknow for allegedly defrauding him.
In
the FIR, filed at the Mohanlalganj police station in Lucknow on January
15, the complainant, Shashank Shekhar Singh, said that he ordered
products online from Shopee on December 10, but what he received were
duplicate products.
The FIR named Shopee, its parent company Bengaluru-based SPPIN India Pvt Ltd, and senior company officials.
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