Discounts offered on inflated prices on ecommerce must be curbed by govt: CUTS International, ET Retail

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<p>Representative image</p> — Representative image

The government and relevant regulatory bodies need to take immediate action to curb unethical practices such as offering discounts on inflated prices in the e-commerce sector, think tank CUTS International suggested in its report released on Saturday. It said that the practice deceives consumers by creating a false perception of savings while the prices are actually higher.

It also said that instead of putting an outright ban on flash sales, the government should focus on strengthening consumer protection measures and ensuring a level-playing field for all market participants.

“It is essential for the government and relevant regulatory bodies to take immediate action to curb unethical practices such as offering discounts on inflated prices in the e-commerce sector,” said the report titled ‘Status of commerce in India: Evaluating Consumer Welfare of e-consumers’.

To promote a fair and sustainable e-commerce ecosystem, it is crucial that sellers have the autonomy to determine the pricing of their products.

“Imposing extra discount burdens on sellers can lead to financial strain, erode their profit margins, and undermine their ability to offer competitive prices,” the report said, adding, there is a need for a clarification to differentiate between ‘deep discounting’ and ‘predatory pricing’.

At present, both terms are often used interchangeably, which can lead to confusion and incorrect categorisation of pricing practices in the e-commerce sector.

“It is crucial for policymakers, regulators, and industry stakeholders to establish clear definitions and guidelines that distinguish between these two concepts,” it said.

Further, it said that to uphold consumer welfare and promote a level-playing field for all sellers, it is recommended that e-commerce platforms refrain from engaging in practices such as self-preferencing in terms of ‘search and ranking’ of products/sellers and maintain platform neutrality.

It also suggested the online retail players to offer content and interfaces in regional languages to expand reach and engage with a larger segment of the population.