New Delhi, November 16, 2017: Top Indian retailers have accused Amazon India of “ambush marketing” after it bundled gift coupons with ITC, Nestle and Coca-Cola products for sale on retail chains such as Big Bazaar, Hyper-City, Star Bazaar, D-Mart, among others according to moneycontrol.com.
Brick-and-mortar retailers are now removing such items from their stores as they see this move by Amazon to acquire more customers without any agreement with them, the Economic Times reported.
“We will not allow ambush marketing at any cost,” said Kishore Biyani, founder of Future Group, the country’s largest brick-and-mortar retail network. “We have started removing such products from the shelves and told brands not to supply us packs that have any promotional tie-up with a rival retailer.”
Describing the move as “below the belt”, D-Mart chief executive Neville Noronha, said: “Principally, the brands should have spoken to us. Amazon is using us as a channel to acquire customers without any agreement with us. We’ve communicated our point of view to the brands.”
According to the reports published in moneycontrol.com Amazon said that it was a promotional exercise. “Amazon regularly runs various kinds of promotional activities with sellers and brand partners in keeping with its vision to make online commerce a part of everyday life,” a company spokesperson said in an email.
However, Amazon’s move was also criticised by Rakesh Biyani, joint managing director of Future Retail. He claimed that large companies like Amazon were directly incentivising consumers with currency/money, which is equivalent to indirect participation in pricing.
“The act of promoting a specific distribution channel through a cash incentive on products sold through traditional distribution is not good for the growth of the industry,” Rakesh Biyani said.
“Small traders and retailers will be significantly impacted from a promotion, which is incentivising consumers to shop in a competing channel,” he added.
Nevertheless, the fast-moving consumer goods (FMCG) companies kept a neutral tone.
Nestle was quoted as saying: “We value our relationship with all our trade partners and collaborate with them for our promotions. In the recent KitKat promotion, there are some operational issues and we are in touch with our partners.”
A spokesperson for ITC replied to the paper on the same lines by saying, “Like every FMCG (fast-moving consumer goods) company, we run different consumer promotion schemes across multiple products from time to time to benefit consumers and promote the sale of our offerings. Currently, there are 38 promotion schemes across multiple products.”
There was no response from Coca-Cola.
Moneycontrol.com futher stated that earlier, Amazon founder Jeff Bezos had pledged to pump USD 5 billion into the Indian market and said that the company will continue to invest in expanding infrastructure and bringing in solutions to enhance consumer and seller experience in the country.