India's Minister Criticizes Amazon's Pricing in E-Commerce Growth

India's Commerce Minister Piyush Goyal has voiced significant concerns regarding the rapid expansion of e-commerce in the country, highlighting potential threats to small retailers. During the launch of a report assessing the impact of e-commerce on employment and consumer welfare, Goyal warned that the anticipated dominance of online marketplaces over the next decade is more alarming than commendable. He noted that the e-commerce market is doubling every four years, suggesting that a future where half of the market is online is a troubling prospect. Goyal pointed to the impressive sales figures of major e-commerce players like Blinkit, Swiggy’s Instamart, and Zepto, which are expected to collectively surpass $4.5 billion this year, reflecting a year-on-year growth rate exceeding 100%. He emphasized that these firms are targeting high-margin products traditionally sold by brick-and-mortar stores, which are vital for the survival of small retailers. This shift raises questions about the sustainability of local businesses in the face of aggressive online competition. The minister criticized the narrative surrounding significant investments from e-commerce giants like Amazon, arguing that such investments often mask underlying financial losses. He referred to Amazon's billion-dollar loss as indicative of predatory pricing practices, questioning the legality of their operations given restrictions on inventory ownership. Goyal reiterated his cautious stance on e-commerce, acknowledging its role while urging careful consideration of its implications for the Indian economy. This is not the first instance of Goyal expressing skepticism towards e-commerce, particularly regarding Amazon's investments, which he previously described as not necessarily beneficial to India.