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The retail business in India is expected to grow to $750-850 billion (around S$960-1,090 billion) by 2015 from the current $518 billion, according to audit and advisory firm Deloitte’s Indian arm, but organized retail accounts for just 8% of this. Photo: Ramesh Pathania/Mint (Ramesh Pathania/Mint)
The retail business in India is expected to grow to $750-850 billion (around S$960-1,090 billion) by 2015 from the current $518 billion, according to audit and advisory firm Deloitte’s Indian arm, but organized retail accounts for just 8% of this. Photo: Ramesh Pathania/Mint
(Ramesh Pathania/Mint)

Cashback vexation

It’s hard for regular shops to compete with online outlets on prices. But banks should consider reaching out to these shops via CAIT with proposals to help them try. Consumer finance deals should reach all

That brick-and-mortar retail outlets have been badly hit by e-commerce is no secret, especially with covid-19 keeping us indoors. But have regular old shops been put at an unfair disadvantage? This is what the Confederation of All India Traders (CAIT) has reportedly complained of to India’s finance minister, alleging that banks have colluded with e-com majors in offering cashback on purchases that aren’t available to offline shoppers.

The last time retailers were up in protest, some years ago, it was over what they saw as predatory pricing in the deep discounts offered by e-com websites. That issue was partially resolved, it seemed, by online outlets giving up on their game of burning cash for market penetration; they needed to stanch losses. The current dispute may prove harder to settle. Large companies always have an advantage in arranging finance deals and suchlike. Online outlets sell far larger volumes on a relatively small base of overheads. It’s hard for regular shops to compete with them on prices. But banks should consider reaching out to these shops via CAIT with proposals to help them try. Consumer finance deals should reach all.

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