Walmart-Flipkart deal to vitiate e-commerce: Traders

US retailer Walmart's USD 16 billion acquisition of Indian e-commerce firm Flipkart will vitiate the country's e-commerce space and create an uneven playing field, traders and retailers said today.

The Confederation of All India Traders (CAIT) said the deal is nothing but a clear attempt to control and dominate the retail trade in India by Walmart through e-commerce in the long run.

On the other hand, Retailers Association of India while staying away from commenting directly on the acquisition, said some e-commerce companies in India have been flouting FDI Policy for marketplaces.

"Digitally powered e-Walmart will certainly vitiate the e-commerce and retail market. There will be an uneven level playing field to the disadvantage of retail traders. Only the venture capitalist, investors and promotors will be benefitted and not the country," CAIT said in a statement.

CAIT Secretary General Praveen Khandelwal said the key issue is whoever controls the platform controls data and digital intelligence.

"The owner can squeeze and dictate anything. It is much more difficult for the government to control and regulate foreign owned platforms and all indigenous players will have no value if a foreign company runs the platform," Khandelwal claimed.

He said the government should immediately frame a national policy for e-commerce and constitute a regulatory authority to regulate e-commerce business in India and till such time, the deal should be put in abeyance by the Government and a close scrutiny should be held of the entire deal.

Retailers Association of India asked the government to take strong steps to ensure adherence to FDI policy.

"We believe that some e-commerce companies in India have not been adhering to the guidelines issued under the Press Note 3 of the FDI Policy for marketplaces. These companies have been directly or indirectly participating in pricing and discounting, which is against the policy that seeks to create a level playing field," Retailers Association of India alleged.

However, Assocham Secretary General D S Rawat said he sees the Walmart-Flipkart deal as a salute to the success of an Indian start-up that pioneered the fledgling online retailing in a country where bulk of the trade is in the unorganised sector.

Walmart Inc today said it would acquire 77 per cent stake in Flipkart for about USD 16 billion in its biggest acquisition till date. The deal values the 11-year old Indian e-commerce firm at USD 20.8 billion.