Indian regulator dismisses complaint against Shopee

According to the Economic Times, India's competition regulator, the Competition Commission of India ( CCI), recently dismissed the charges against Shopee.

Image source: Economic Times

The complaint stems from a few months ago when the Confederation of All India Traders (CAIT) submitted information to the CCI, claiming that Shopee was selling a wide range of products at extremely low prices in an effort to undermine competition from local small retailers.

"Shopee has undermined local competition with predatory pricing and deep discounts aimed at attracting customers in large numbers, severely affecting traditional and small-scale businesses in India," the complainants said .
However, the CCI rejected the complaint , saying that Shopee entered the market in the presence of many existing players, including Amazon, Flipkart, Myntra and Nykaa, and therefore did not have significant market power . The CCI noted that despite the complaint alleging that Shopee adopted discounting practices similar to those allegedly used by Amazon and Flipkart, in the Commission’s view, “Shopee is a relatively new entrant in a market with mature competitors and does not have significant market power at this stage, let alone a dominant position.”
Recently, CCI also rejected CAIT's allegations against Amazon, claiming that the US-based company and its affiliates were engaging in unfair trade practices on the platform. CCI said the allegations lacked acceptable and necessary evidence.
Only targeting high-quality companies? CAIT loves to accuse
In fact, Shopee is not the first e-commerce platform to receive complaints from CAIT.
In 2019, CAIT had slammed e-commerce giants Amazon and Flipkart, calling them "economic terrorists" for violating FDI policy norms.
In September 2021, CAIT announced that it would launch a nationwide protest to boycott foreign e-commerce companies such as Amazon and Flipkart. According to Ennet, CAIT had urged the Indian government to ban Amazon's portal in India and prohibit Amazon's operations in India.
Image source: Do News

Perhaps what CAIT is most "worrying" about is that although Shopee's rapid rise is inseparable from the platform's own advantages, its highly localized capabilities are the key to Shopee's outperformance of other competitors in multiple markets.

Whenever entering a new market, Shopee will choose to launch independent APPs in each market, build local teams and fully trust, respect and adapt to the local culture and environment, and provide localized e-commerce ecological support for local consumers and merchants.
In October 2019, Amazon officially entered Southeast Asia and launched a site in Singapore. At that time, the average monthly visits of Qoo10, Lazada, Shopee, EZBuy, and eBay were almost the same in Singapore. The situation changed last year - Shopee almost became the leader of the main e-commerce in Southeast Asia, widening the gap with other platforms.
As we all know, the Indian market has always been complex, with multiple races, multiple beliefs, and different economic strengths in different regions. Even Amazon had to struggle for several years before it could be called "established" in India . However, Shopee, as an e-commerce platform originating from Southeast Asia, has adopted a localized strategy since its inception and has run through multiple markets with complex cultural backgrounds. Therefore, India's inherently complex business environment may not be that difficult for Shopee to solve, which may be an important reason why CAIT is very nervous about this new platform.
Ever since Shopee, a Singaporean e-commerce company, announced its entry into the Indian market, it can be said that the "targeting" has never stopped.
Judging from the current results, CAIT’s plan has not been successful. The Competition Commission of India ( CCI) recently rejected its complaint against Shopee. On the one hand, it shows that as a newer entrant, it does not have the dominant market power. On the other hand, it also denies the accusation that Shopee has engaged in unfair competition in India.
Beyond Southeast Asia, Shopee’s path to global expansion
Looking back at Shopee’s overseas expansion journey, localization is its core strategy. It builds excellent local teams in various markets and is highly involved in the local markets.
Shopee has also opened a cross-border business to better help cross-border sellers seize blue ocean opportunities. According to platform data, Shopee's cross-border business has performed well: in the 2021 9.9 Super Shopping Festival, more than 45 million products were sold in the first 99 minutes; in the 2021 11.11 promotion, more than 2 billion products were sold in total; in the 2021 12.12 birthday promotion, the number of orders for new cross-border sellers in the first two hours was three times that of normal days.
It can be seen that many cross-border sellers regard Shopee as their second "egg basket" - as the "big brother" of the cross-border e-commerce industry, Amazon mainly faces developed countries in Europe and the United States, with a higher degree of market maturity and more complex platform rules, which is more suitable for mature sellers who pursue boutique and branding; while Shopee mainly faces the Southeast Asian e-commerce market, which has a relatively low market maturity and great room for development.

In addition, unlike Amazon, you need to prepare 500,000 yuan of entry capital (FBA) before entering the market . The simple store opening procedures and low store opening costs also make Shopee popular among domestic cross-border sellers.

But whether it is Shopee or Amazon, they have encountered some resistance in their development in India against the backdrop of rejecting external capital and conserving local enterprises.
This time, CCI's dismissal of the complaint against Shopee and others seems to be a good start. And whether the development of foreign e-commerce platforms in India will be disrupted remains to be seen. Can Shopee continue to develop smoothly in India with its localization strategy? We will wait and see.