India’s Open E-Commerce May Quietly Closer Another Door For Amazon, Flipkart

The investing world is enthralled by a determined Beijing as it cuts China’s private sector down to size by relentless regulatory action. That’s good news for New Delhi: Its more subtle maneuvers in the same direction are going largely unnoticed. Amazon.com Inc. and Walmart Inc.’s Flipkart, however, would surely have felt the rising temperatures. Even as they weigh draft e-commerce rules that seek to restrict online marketplaces–not just theirs, but also the planned super-app by India’s Tata Group–a new existential threat lurks around the corner: a state-sponsored open network for digital commerce. Commerce Minister Piyush Goyal has set up a committee, chaired by him, to “democratize digital commerce” and “provide alternatives to proprietary e-commerce sites,” according to a ministry press release. The ministry says that merchants will be able to save their data under the open network to build credit history and reach consumers, breaking silos imposed by platforms “to drive innovation and scale.” Several questions arise: Are Amazon and Walmart-Flipkart, which aren’t directing even 10% of India’s $800 billion annual retail sales between them, stifling innovation to a point where the harm exceeds their positive influence from aggregating demand? Should they, therefore, be mandated to operate their merchant-onboarding processes according to some preset rules, eroding much of their power to determine what goes on over platforms in which they have invested billions of dollars? Like everywhere else, the danger with dominant marketplaces in India is that they will copy the bestselling ideas of merchants and introduce them as private labels. But is this threat currently so large as to require a systematic downgrading of platforms?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this:
search previous next tag category expand menu location phone mail time cart zoom edit close