Walmart-Flipkart deal faces opposition from traders
The trading bodies have gone all out to oppose the Walmart-Flipkart deal. The secretary general of Confederation of All India Traders, Praveen Khandelwal said that the bodies are well aware that both parties (Walmart and Flipkart) in picture is known for flouting the policies, circumventing the law and indulging into deep discounting and predatory pricing.
Khandelwal further said that they both agreed to enter into the deal with an urge to capture, control and monopolise not only ecommerce market but even the offline retail trade of India. “Interestingly, both ecommerce and retail trade have no specific government policy paving the easy way for both of them to manipulate things to their advantage. More than Flipkart, it is an opportunity for Walmart to fulfil its desire to enter the Indian market which it is trying desperately since years.”
Targeting Flipkart, Khandelwal stressed that the ecommerce firm jumped to the opportunity to make money and earn huge profit. “The venture capitalist and private equity people those who have funded Flipkart have all smiles since their part of share is earning them handsome margin. Only the poor retailer of the country is at the receiving end.” This company has a leading market share across certain product categories like smartphones and fashion; and have exclusive tie ups and preferential sellers. “The market presence would be further augmented once the said transaction takes place. This would lead to adverse effect on both offline market and online market.”
Khandelwal said, “The offline retailers/ wholesalers would not be able to compete with the said conglomerate due to lack of funding and prevalent market practices, small traders have to partner with e-commerce players like Flipkart but they have to face discriminatory conditions. This fact would be accentuated since Flipkart would, probably, give preference to inventory of Walmart.”
The body blamed both Walmart and Flipkart of engaging in activities that would hurt offline retailers/wholesalers. Some of their preferred sellers are WS Retail, Retailnet, Omnitech Retail, SupercomNet who are only on the platform of Flipkart and not on any other platform. “The present modus operandi is very clear: Flipkart purchases goods and sells at discounted prices, while incurring a loss, to few sellers like W.S. Retail, which are further sold on the its platform.”
Furthermore, there are important competition concerns regarding Walmart’s role on Flipkart’s B2B platform. “With Walmart, a global retail giant with its own range of multi-brand products, attempting to take another shot at the Indian market, there is a high likelihood of Flipkart and Walmart would affect other wholesalers on the platform and eliminating them in the long run.”
The combined entity would have affiliates in the entire supply chain. “The complainant apprehends that the deal is bound to circumvent established laws and FDI policy of the government since the ultimate object of Walmart is to enter the retail trade of the country and in the absence of any policy on e-commerce or retail trade, it would be easy for Walmart to reach out to retail market, which otherwise it cannot enter due to FDI policy,” he added.