Were Jeff Bezos' plans to dominate Indian e-commerce ambushed by Ambani?

Companies News:

Amazon.com and Walmart Inc.’s plans to dominate India’s online retail landscape have been ambushed by Prime Minister Narendra Modi’s political priorities heading into a tightening election.

The vote, which must be held by May, has increased the influence of local retailers that lobbied for growth-crimping curbs on the U. S. giants. On cue, India this month rolled out constraints on foreign e-commerce players including Amazon and Walmart-owned Flipkart, which together control 70 percent of its online shopping. The tighter rules, aimed at protecting small traders, may end up benefiting the country’s richest man, Mukesh Ambani, who is building a home-grown competitor.

Modi’s Bharatiya Janata Party is still licking its wounds after being trounced in three key recent state polls and a year ago fighting an unexpectedly close contest in Gujarat -- Modi’s home state. Among small businesses, which are a traditional support base, the government’s popularity has been eroded by 2016’s surprise cash ban and the subsequent chaotic roll out of a new sales tax.

The rules now bar Amazon and Flipkart Online Services Pvt. Ltd. from owning inventory, and require them to treat all vendors equally, throttling discounts and exclusives -- a huge advantage to homegrown companies including Ambani’s new venture. His Reliance Industries Ltd., which owns India’s largest retail chain and third-biggest telecom network, has the potential to evolve into a local version of Amazon or Alibaba Group Holding Ltd., UBS AG said last month.


 “Whether serendipitous or not, India’s tightened regulatory regime for online retailers is a huge win for Reliance with its new retail ambitions,” said Sanchit Vir Gogia, chief executive officer of consultancy Greyhound Research. “This could be a field leveler for them..Read More

Walmart, Amazon shape online sellers lobby to fight new e-commerce rules

Companies News:

Hit by the latest e-commerce rules, American majors Walmart and Amazon are planning to pitch the sellers on their Indian platforms against the domestic lobby groups such as the Confederation of All India Traders (CAIT) and Swadeshi Jagran Manch (SJM), it is learnt.

The newly renamed Department for Promotion of Industry and Internal Trade (DPIIT) had last week clarified that there would be no extension to the February 1 deadline for e-commerce firms to comply with the conditions related to the FDI policy in the sector (known as Press Note 2), triggering panic among prominent online firms such as Amazon India and Walmart-owned Flipkart.

Since CAIT and SJM have been pushing the government for an e-commerce policy that keeps in mind the interests of traders, the foreign majors are trying to get their sellers together and put forward their cause. Since the two biggest e-commerce companies have been adversely affected by the new conditions in Press Note 2, they are arming themselves with a parallel lobby group represented by sellers ahead of a proposed e-commerce policy.

The financial hit


 DPIIT’s move to not extend the February 1 deadline has had an adverse affect on business as both Amazon India and Flipkart have had to cut down their number of sellers by as much as 30 per cent. They have had to slash sales in almost 60 categories involving 45 million products...Read More