After months of speculation and stiff dealing, involving all the biggest global ecommerce players, it was recently revealed it would be a Flipkart Walmart deal. We wrote about it here. But there is local resistance.
The Confederation of All India Traders (CAIT) says it represents over 70 million of India’s small traders said it has filed an anti-trust petition with the Competition Commission of India (CCI) objecting to the Flipkart Walmart.
The CAIT petition has cited concerns that the acquisition “will create unfair competition and uneven playing field” and they fear “predatory pricing, deep discounts, and loss funding.” Other groups, including Swadeshi Jagran Manch (SJM), which held a protest march in New Delhi have also criticised the deal. And the All India Online Vendors Association (AIOVA) has approached the CCI alleging that Flipkart gives preferential treatment to a few sellers.
Flipkart is a combination of predation, exclusive tie-ups, and of preferential sellers where even online vendors face discriminatory conditions. There will be a denial of market access to non-preferred sellers coupled with the complete annihilation of small-time traders on offline platform. Walmart, arguably the world’s largest retailer in the market, would sell its inventory on the platform of Flipkart, either directly or through a web of associated preferred sellers.
– Confederation of All India Traders
Walmart and Flipkart have both written to the Competition Commission of India (CCI) about the transaction and have stated that the relevant market for their combination is in B2B sales primarily. The deal needs approval from the CCI. Walmart hopes it will will take over 77% of the Indian ecommerce company for $16 billion.
Walmart has thus far been present in India only through its B2B wholesale business. The two parties said that the “proposed transaction does not give rise to competition concerns”.
So whilst the deal is formalised and ready to go, it still has hurdles to jump and must be approved. Another example of big ecommerce concerns facing concerns from local traders as they expand overseas.
