The $500-billion American retail giant has always been a cause of concern for local businesses including mom and pop stores as they feared job losses after Walmart’s entry.
Walmart set up its wholesale or cash and carry business in India through a joint venture with Bharti Enterprises in 2007, but it hasn’t been able to start a multi-brand operation so far due to policy hurdles. It also broke off with its JV partner Bharti in 2013.
Sellers, especially the smaller ones, on Flipkart are also planning to go to court as they fear that Walmart could bring multiple private labels in India and flood the e-commerce platform with its own products. That would take away business from the sellers, one of them said.
In fact, many of the sellers want assurance that Flipkart’s algorithm would promote their products equally after the deal with Walmart.
According to the spokesperson of the All India Online Vendors’ Association (AIOVA), which has 3,500 sellers on large platforms like Flipkart and Amazon, the sellers’ community has received no communication or update so far on the deal talks between Walmart and Flipkart.
“There has been no communication from Flipkart or other parties involved in the matter. While we understand that the deal discussions are private, it leaves us in the dark as to what is the future for us on the platform. We want to get clarity on the way forward as we also need to plan accordingly,” said the AIOVA spokesperson.
“We are studying the situation and will take appropriate action, including the legal route, if necessary,” the spokesperson added.
Meanwhile, the government does not see any violation in the proposed 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 (DIPP) said. The deal is not likely to be under government scrutiny, he said. Subsequently, the developments may be supervised by a potential regulator in the e-commerce sector.
An inter-ministerial think tank is currently in the process of preparing a framework for an e-commerce policy within the next six months.