Days after the government’s crackdown on goods being sent to India in the guise of gifts by Chinese e-tailers, e-commerce giant Alibaba said it has taken action against thousands of sellers on its platform who have been caught in the act.
Officials in the Indian customs department last week said large shipments from Chinese e-commerce platforms have been landing on Indian shores, marked as ‘gifts’. Shipping goods as gifts allows an entity to avoid paying duties and taxes, as the government exempts gifts of up to Rs 5,000 under existing laws to allow NRIs to send them back home to relatives.
The government is expected to take up the issue in the draft e-commerce policy that is set to be unveiled soon. Officials said the clampdown will also have an impact on illegal food products and spurious cosmetics being smuggled into India. This brings the prices of such goods down and gives them an unfair advantage over sellers on domestic e-commerce marketplaces.
“AliExpress, as a marketplace, respects local regulations and laws and forbids any illegal activities by sellers on its platform,” an Alibaba spokesperson told TOI. “AliExpress has strict measures in place to take action against items that contain descriptions that encourage tax avoidance. Any infringing sellers found on the platform face penalties including store closure.”
The move comes against the backdrop of the government taking note of the fact that the national exchequer has been missing out on significant revenues in the form of duties and taxes that could have been collected from Chinese businesses selling goods over the internet. Domestic etailers, too, have had to face unfair competition from their counterparts from the neighboring country.
“Not paying duties and taxes brings down the prices of goods significantly,” said a senior executive at a Bengaluru-based e-tailer. “The goods, including fashion wear, on Chinese platforms are at least 40-50% cheaper than what is available on Indian e-commerce marketplaces.”
A senior Alibaba executive told TOI that the crackdown by the Chinese e-commerce giant on errant sellers on its platform has been gathering steam since the ‘Singles Day’ sale in November that helped it clock over $30 billion in 24 hours. “We have made our position very clear to our sellers through agreements on our platform,” he said.
Slowdown of online sales in China has prompted a host of Chinese e-tailers, including Shein, Club Factory and Alibaba’s e-tailing arm AliExpress, to look towards a nascent but booming Indian e-commerce market. Several of them have become as popular as Amazon or Flipkart on Google Playstore, according to app ranking platform App Annie. The Mumbai customs department last week said courier companies, too, have been informed about the issue of ‘gifts’ and their registrations will be cancelled if they are found flouting regulations.― Newsrain