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Tuesday, 05 November, 2019, 11 : 05 AM [IST]

Disruption & Destruction

As a business journalist, the first thing I try to probe even in a casual chat with the trade these days is not about their personal well-being, but about the health of their business. When the whole world is talking about economic melt-down, what else one could ask? In one such exchange of pleasantries, a young travel agent friend said that he's diversified into exports as OTAs have really made life tough. The no love lost relationship between the OTAs (which are heavily funded) and the offline players – travel agents, hoteliers, etc. – is a reality in markets across the world, and there have been various movements in the last few years against deep discounts, special deals, exclusive selling rights, etc., globally and even in India.

Although many such movements have died down over time because of lack of direction and proper leadership to take the fight to logical conclusion, one that seemingly hit the target is that of FHRAI which challenged the might of the 'dominant' online travel player, MMT-GO, and budget hotel aggregator, OYO, with the CCI. After due perusal of the case put up by FHRAI against these entities, CCI, has ordered a thorough investigation into the abuse of dominant position by the online players in respect to predatory pricing, parity restrictions, and allegations of creating artificial demand-supply gap, etc. While a final verdict is still awaited, as CCI has given 150 days to the DG to investigate and submit its report, the brick and mortar industry can heave a sigh of relief in having the right agency took serious note of their grievance.

The decision has also come at a time when there is whole clamour against e-commerce platforms flouting the FDI norms gaining momentum in the country, and now the pressure is mounting on the government to regulate the e-commerce platforms from monopolising the retail market in the country. However, there is equally significant pressure from outside lobbies, especially the US, to further liberalise the e-commerce regime. Therefore, it would be exciting to see how the government does the balancing act in the proposed e-commerce policy.

In the meanwhile, reports suggest the hype behind the India-born hotel aggregator story also going into a mess, not only in India but also in other markets, including the US. Reports of mass disenchantment with the brand among the owners in matured hospitality markets like the US goes on to prove that the Indian owners were right.

While disruptive technologies and concepts are welcome as it elevates the prevailing system to another level, it's equally significant that such innovations do not become 'destructive' for others. There is a blurring of lines dividing disruption and destruction in the new game dominated by Big Funds, which demands stricter regulation.

PKrishna Kumar
Bureau Chief
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