By Prarthana Mitra
Indian traders in over 1000 locations across the country are staging vehement protests against United States-based retailer Walmart’s proposed acquisition of a 77% stake in the Indian e-commerce platform Flipkart.
The Confederation of All India Traders (CAIT) which represents over 6.5 crore traders is reportedly joined by other traders’ organisations including All India Online Vendors Association (AIOVA), Swadeshi Jagaran Manch (SJM), Indian Farmers Association and the National Hawker Federation in their country-wide agitation.
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Here’s what the traders fear
CAIT has cited legitimate concerns of predatory pricing that could put offline Indian traders out of jobs. Other concerns include that online sellers will be taxed more for displaying local products alongside a large of array of branded goods which will soon make inroads with Walmart’s backing.
Praveen Khandelwal, Secretary General of the traders’ body, alleged the lack of any regulation or policy for e-commerce in India will make the industry more competitive and harder to survive in for small-scale local traders, manufacturers, and wholesalers who have been suffering due to e-commerce for the last decade but found a relatively safe haven on Flipkart’s marketplace. “We have organised the protest to urge the government to reject Walmart’s proposed acquisition of a majority stake in Flipkart. Through this acquisition, Walmart is trying to make e-commerce a passage to spread its wings into the retail trade in India,” Praveen Khandelwal, Secretary General of CAIT, told BusinessLine.
“Vitiated to a great extent in past years by several leading e-commerce companies”, Khandelwal claims that the sector could plunge further and deeper into a cornucopia of predatory pricing, deep discounting and loss funding,” courtesy of the Wal-kart deal. The malpractices, for the lack of a proper regulatory body, could even extend to Walmart finding it exceedingly easy to circumvent the FDI policy.
What is the need of the hour?
Urging the government to reject the deal, traders seek protection of their livelihood in the face of Walmart’s potential usurpation of offline as well as online retail in India, which forms Asia’s largest domestic market for consumers.
Demanding for a policy that protects traders and provides clarity on the deal, the trade wing has sought the political route of collective agitation. Several bodies including the AIOVA are currently engaged in advising traders on “how many companies the Flipkart Group has, which company does what, which ones Walmart will take over and how it will affect us sellers.”
About the deal
Walmart hopes to utilise Bengaluru-based Flipkart’s market, customer database and logistics with its $16 billion acquisition of the home-grown retailer. In return, Walmart hopes to bring expertise and infrastructure to give the e-commerce market a fillip in the right direction. Besides, the merger will also put Walmart in a better position for a head-to-head battle for the Indian market with rival Amazon.
Prarthana Mitra is a staff writer at Qrius.
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