Flipkart’s continued deep discounting could mean more trouble in the future

  • Flipkart is banned from selling GOQii products on its site over deep discounting.
  • The Walmart-owned enterprise earlier deemed these accusations to be ‘baseless’.
  • Tech giants were hoping to seek clarifications over the new e-commerce rules after the elections ended in India.
  • The country’s new government is likely to continue keeping an eye on the foreign players for any more violations.

The Indian government is serious about implementing its new e-commerce rules as Walmart-owned Flipkart just found out.

The online shopping platform and its sellers are
banned from selling GOQii products — a Ratan Tata backed smart wear brand — on the site, for the foreseeable future because of deep discounting. This is as per an interim order by the Bombay Civil Court.

Earlier, Flipkart had deemed GOQii’s claims to be
baseless when the fitness brand reached out the Department of Promotion of Industrial and Internal Trade (DPIIT) and the Competition Commission of India (CCI) with concerns over how its products were being sold online at discounts of up to 70-80%.

The tech giant was actually waiting for India’s new government to come into power to seek clarifications around the rules. But, considering that the Bombay Civil Court ruling didn’t play in Flipkart’s favour — the company will now also be under DPIIT and CCI’s radar, for flouting their norms.

Deep discounts, deep trouble

Vishal Gondal, the founder and CEO of GOQii, sent legal notices to Flipkart over the issue. The Bombay Civil Court passed an interim order to prevent any more damage to the fitness gadget firm, from excessive discounts.

Vishal Gondal, founder and CEO of GOQiiBCCL

Press note 2, the new foreign investment policy for online shopping — enforced in February — dictates that foreign e-commerce businesses operating in India can’t offer deep discounts because it can influence prices in the market.

GOQii Tech products, despite the order, were being sold online at steep price cuts. According to
Entrackr’s sources, the resulting prices were lower than the manufacturing cost of items.

India may have pushed out new e-commerce rules but not everyone is following them to the tee. The country’s new government is likely to continue keeping an eye on the foreign players for more such violations.

See also:

Flipkart’s ‘House of Flagships’ is its latest bid to get the ‘edge’ over Amazon in India

Flipkart is bringing in robots to help it sort through packages

Microsoft’s ‘Week of AI’ ropes in Flipkart and InMobi execs for insights

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