Walmart, the biggest retail chain in the world is days away from grabbing the deal of buying 75 percent of Flipkart’s stake at $15 billion. This deal will change the Indian online shopping industry to a big extent.
Sellers on Flipkart are worried about this and they are planning to go to court as they fear that Walmart will prefer to sell its own products after this deal. This will bring a huge decrease in sales of small-scale sellers on e-commerce platforms in India. Sellers are even trying to contact Competition Commission of India (CCI) to block the deal from getting finalised.
Traders are arguing that this deal could be a violation of India’s foreign direct investment rules. “It’s really unfortunate that even after having a clear FDI policy, multinationals are finding an escape route, whether it is in retail or e-commerce. Walmart, after failing to enter India in the retail sector through FDI, has chosen the e-commerce route, which will be quite harmful for the trading community,’’ Praveen Khandelwal, secretary general, Confederation of All India Traders said.
Traders also believe that this will increase unemployment in the country as small retailers will get a tough competition from Walmart. In reply, sellers are demanding a surety that Flipkart’s algorithm will not prefer Walmart’s self-owned products in any way.
On the other hand, the government doesn’t see any issue in this deal. “A foreign entity making inroads into a sector, which is still in many ways nascent in India, is significant,” an official at the Department of Industrial Policy and Promotion said.
Note that Walmart entered the Indian market in the year 2007 through a joint venture with Bharti Enterprises and is still facing policy hurdles which are stopping it to grow in India.
It is expected that this deal will be completed very soon and both the sellers and online buyers are curious about how Flipkart will work after this acquisition.
