Traders from Ulhasnagar, a small town in western India near Mumbai, plan to get rid of sales competition from Amazon by placing fake orders in bulk, hoping that the e-commerce company blacklists the whole town.
The festival of Diwali is around the corner, but traders in Ulhasnagar were reportedly incurring losses due to online competitors offering discounts they could not compete with. In a meeting held on Monday, the local traders association planned to bombard the e-commerce giant with fake orders, The Times of India (ToI) reported. The strategy they discussed was to place large orders in bulk to be paid on delivery, and to cancel them mid-way. As one trader told ToI:
If there a huge number of rejections from a particular area, then online stores will automatically block the area code for sale.
Getting bombarded with bulk fake orders is not new to Amazon. Every festive season, there is usually a spike in fake orders, particularly from rural and semi-urban areas. But since this happens during festive seasons, Amazon reportedly finds it hard to investigate and find out which ones are fake before initiating delivery.
On the other hand, many offline traders experience losses even during festive seasons. According to Economic Times, the Diwali shopping season from late September to early November, is usually the largest crowd puller for many retailers and brands in India, aggregating nearly 35-45 percent of their annual revenue. But Trak.in reported that the All India Mobile Retailers Association (AIMRA) representing 25,000 offline phone retailers, were experiencing nearly 25-30 percent less sales this year.
The loss in sales was reportedly due to massive festive discounts from e-commerce companies that sold many products at prices even lower than the distributor’s price. All this has led the traders to decide to play dirty against Amazon and the other e-commerce giants.
“If you can’t beat them, join them,” goes a proverb. But Ulhasnagar traders seem to like the third option of “blocking you off completely from competition,” which they hope is implemented against Amazon not just in their town, but in the entire city.
We have reached out to Amazon to understand their strategy to counter this resistance from traders and will update this post once we get a reply.