Chinese e-commerce giant has started operations in India through Shopee

In the year 2020, The Ministry of Electronics and Information Technology invoked issued directions for blocking the mobile applications under section 69A of IT Act 2000. There are various mobile applications which are being funded and are operating under the influence of Chinese entities and continue to operate in India through the smokescreen afforded by a global maze of equity holdings and complex corporate structures. Such is the set-up of SPPIN which has been created to penetrate into the India e-commerce markets and is utilising the Chinese investments through multiple and complex corporate structuring. SPPIN is incorporated in India to operate globally established e-commerce platform, Shoppe. The e-commerce brand Shoppe is owned and operated worldwide by SEA Limited, an entity incorporated within the jurisdiction of Cayman Islands with offices in Singapore. The founder is Forrest Xiaodong Li, a Chinese born, recently turned Singaporean citizen. SEA Limited is backed by Tencent, which owns approx 43% of class B shares.

As such no key business decision in SEA Limited can be taken without the approval of Tencent. Recently, Tencent Cloud Computing (Beijing) company limited is disclosed as a related party to SEA Limited in its annual reporting to the Securities and Exchange Commission, United States. Further, the disclosure also states that SEA Limited uses Tencent Cloud to store their data. At the same time, the privacy policy states that, Your Personal data and /or information may be transferred to, stored or processed outside of India. In most cases, your personal Data will be transferred to Singapore to be processed, where its servers are located. It logically states that the data which will be collected from Indian citizens by Shoppe through SPPIN will be stored and processed on Tencent Cloud. It shows how smartly the Chinese tech majors may have manipulated documents to meet the regulatory compliances.

Moreover, the Memorandum of Association of SPPIN establishes the intention of the company and it clearly reflects on the modus operandi. In 2015, Shopee was launched in Singapore, Indonesia, Malaysia, Thailand, Taiwan, Vietnam and the Philippines. Recently, Shopee has decided not to continue the Shopee service in France, whereas it is present in Spain and Poland in the form of localized versions of the app. Many products are sold on Shopee at low prices of Rs 1, Rs 9 and Rs 49 etc. This is a deliberate pricing strategy adopted by the e-commerce giant with the intention of reducing prices of products to nonsensical and loss-making levels in the short-term; so as to undercut and extinguish small sellers and retailers in the long term, said the traders body. As per CAIT, Chinese e-commerce companies have violated rules. It undercut and extinguishes offline players and micro and small-scale businesses and retailers in the country and amounts to predatory pricing and unfair trade practice.. A question remains unanswered, with these tactics can shopee win in India?

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