Deep Discounts To Be A Thing Of The Past? New E-Commerce Policy To Put An End To Predatory Pricing, Say OfficialsRepresentative image. (Pradeep Gaur/Mint via Getty Images)

According to government officials, any new e-commerce policy that will be rolled out by the government will provide the necessary framework to put a break on predatory pricing undertaken by online marketplaces through deep discounts, reports Business Standard.

Predatory pricing is a business strategy in which products are sold at extremely low prices, sometimes even lower than their costs, to attract new customers or create an artificial barrier of entry for existing or new competitors in the market.

A draft e-commerce policy that was being deliberated by the government a few months ago proposed to define and set fixed norms to govern marketing tactics like 'zero payment offers', 'flash sales' and 'unlimited offers.’ These strategies have been profitably used by India’s established e-commerce players to cut competition and increase online sales.

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Though certain clauses of the previous draft faced criticism from both the civil society and the market players, the one on predatory clause was agreeable to all. “But we didn't face any major hurdle on the deep discounting clause because e-commerce companies, retailer bodies and consumer groups agree it is not a sustainable or healthy model of business. So, the new draft, whenever it comes, will absolutely have that clause,” said a senior government official.

However, on a positive side, the number of women employed in the e-commerce delivery industry has doubled in a single year and now stands at 40,000.

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