Top Indian retailers including Future Group and D-Mart are furious at Amazon over what they see as ambush marketing inside their own stores. Amazon India has bundled its gift coupons with products of ITC, Nestle, and Coca-Cola being sold on the shelves of retail chains like Big Bazaar, HyperCity, Star Bazaar, D-Mart, BigBasket, and others.
Indian Retailers Removing the Items
The Brick and Mortar retailers are expelling the things as they consider this to be a move by Amazon to get their clients. “We will not allow ambush marketing at any cost,” said Kishore Biyani, founder of Future Group. “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.”
Amazon Gift Coupons
Packs of brands such as ITC’s Yippee Noodles, Nestle’s KitKat chocolate and Coca-Cola’s Sprite and Fanta soft drinks are few brands that are retailed at offline stores along with Amazon gift coupons. D-Mart chief executive Neville Noronha described the move as being “below the belt.”
He further said that “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.”
Jeff Bezos Plans to pump $5 million into India
Jeff Bezos has vowed to pump $5 billion into India and has said it will invest to put and develop in the nation. It’s presently focused on selling food and grocery online with arrangements and advancements and has reserved $500 million for this after the government permitted foreign direct investment in the retailing of such things if they are made and bundled in India.
Amazon said the exercise was part of its promotion. “Amazon regularly runs various kinds of promotional activities with sellers and brand partners to make online commerce a part of everyday life,” a company spokesperson said.
Ambush Marketing is an Old Practice
Worldwide, companies have long engaged in cross-channel promotions and ambush marketing, Third Eyesight chief executive Devangshu Dutta said. Such practices are not unethical unless specified in the contract.
Indulging in Predatory Pricing
This is not the first time Amazon and brick-and-mortar retailers have been engaged in a bitter battle over discounting and pricing strategies.
Large e-commerce players, which burn cash to acquire customers, have been frequently alleged to indulge in predatory pricing by offline retailers.