Praveen Khandelwal, the general secretary of the Confederation of All India Traders (CAIT), had informed the CCI that the company sells various products at extremely low prices in order to eliminate competition from small retailers. Khandlewal claimed in his complaint that Shopee’s deep discounting tactics, such as flash sales of products for Re.1, Rs 9 and Rs 49, were aimed at attracting a large customer base and consumer preference data that the company could use to its advantage. He also claimed that Shopee used similar discounting practises to those allegedly used by Amazon and Flipkart.
CAIT previously objected to Shopee’s exclusion from the Centre’s list of 54 Chinese apps banned last month. CAIT argued that Shopee should be banned as well because it is owned by SEA Limited, the same company that owns Garena: Free Fire, a popular mobile game that was among the 54 apps restricted in India.
CAIT claims that Shopee established SPPIN India Private Ltd for operations in India in violation of FDI rules that require prior government approval for investment from countries that share a land border with India.
The CCI concluded in its analysis that Shopee lacked significant market power because it is a new entrant in a market dominated by well-established players.
“…though the allegation is that Shopee is engaging in similar discounting practises as alleged by Amazon and Flipkart, the Commission does not appear to the Commission that Shopee possesses significant market power, much less dominance, at this stage,” the CCI stated in its order.
According to experts, proving that a company is engaging in predatory pricing necessitates the company being a dominant player in the relevant market, as well as proving that its goods or services are being marketed below cost and that sub-tactics are being used to eliminate competition.
