The All India Federation of Trade Merchants sent a letter to the Finance Minister of India, demanding that Shopee be banned. It believed that its Chinese background violated India's foreign direct investment policy and threatened the interests of Indian merchants.
The Federation of All India Traders (CAIT) said that it had repeatedly boycotted Amazon on behalf of 80 million Indian businessmen and 40000 chambers of commerce. When Bezos visited India in 2020,CAIT organized protests, believed that Amazon and Flipkart had "predatory pricing and other anti competitive practices" in India. India's anti-monopoly department CCI (Competition Commission of India) decided last week that Amazon concealed trading information, so it revoked Amazon's investment license for an Indian retail company and imposed a fine of 2 billion rupees (about 27 million dollars). Prior to this, CAIT also wrote to CCI about this matter.
Chinese companies and commodities are also objects of resistance of CAIT. In July this year, CAIT launched a campaign to boycott Chinese goods, hoping to reduce imports of goods made in China.
The reason why CAI targeted Shopee this time was Shopee's Chinese background, saying that it violated India's foreign investment policy. India introduced a new FDI policy last year. All foreign investment from countries bordering India's land border must be approved by the government. And CAIT said that Shopee operates in India through SPPIN India Private Limited, which belongs to SPPIN I Private Limited and SPPIN II Private Limited registered in Singapore, and the parent company of these two companies is SPPIN Limited registered in the Cayman Islands. CAIT believes that this complex structure is intended to "confuse the Indian government to introduce Chinese capital into India". CAIT also called Shopee owned by Tencent and Li Xiaodong. According to the annual report of Donghai Group, Shopee's parent company, in March, Tencent holds 22.9% of its shares.
In the open letter, CAIT mentioned that India had previously taken off the shelf of Chinese applications, saying that Shopee had covered up its background and was therefore not subject to supervision.
This is not the first time that CAIT has made a statement against Shopee. When Shopee began to recruit CAIT sellers in India in August, it publicly asked to investigate Shopee's Chinese background. This time, CAIT also said that many goods on the Shopee platform are priced at INR 1, INR 9 or INR 49. Its low price strategy will pose a threat to offline merchants, small and micro enterprises and retailers in India in the long run, resulting in "predatory pricing and unfair trading".
India is a stop on Shopee's international road this year。 In addition to India, Shopee also entered Poland, Spain, Mexico and other countries this year. According to media reports, Shopee's daily orders exceeded 100000 a few weeks after its soft launch in the Indian market. The number of downloads from Google App Store exceeded 1 million. In December, the number of merchants exceeded 20000. Shopee is expected to compete with Amazon and Flipkart in India. Amazon and Flipkart currently occupy a leading position in the Indian e-commerce market. It is reported that the daily order volume of both is between 2 million and 2.5 million.
Whether Shopee will experience the same storm as Amazon and TikTok in India depends on how the government responds.
Article | Shi Yi
Editor | Zhao Xiaochun
Fig. | Unsplash