Amazon and Walmart join forces to lobby over Indian ecommerce
If you follow the news at all, you probably don’t think of ecommerce titan Amazon and retail empire Walmart as the best of friends. In fact, far from it. The two everything-shop giants have fought across various battlegrounds, but one of the most recent is the Indian ecommerce market. Now, these long-time enemies have found common ground, and are joining forces to lobby the Indian government over new regulations that threated to hobble their respective plans for expansion.
Amazon’s share price is already up by 6% so far in 2019
Source: Yahoo Finance
The new regulations pose a significant threat to both companies’ ecommerce infrastructure in the country. And that’s a big problem: the Indian ecommerce scene is a major, fast-growing, market that is likely to become one of the world’s most important over the next decade. Additionally, both Amazon and Walmart have already sunk billions of dollars into their operations there.
The regulations will require that online marketplaces treat all vendors equally. This effectively bars foreign companies from featuring exclusive products on their platforms, owning inventory, and using it to drive discounts and impact pricing. These are huge advantages for Amazon and Walmart, and their growth predictions absolutely take them into account.
Both Amazon and Walmart also get significant amounts of their inventory in India through companies they own or back – that’s something that the new regulations disallow, and they will be expected to sell their stake in all such companies.
Amongst the things they are lobbying for is an extension on the deadline for compliance, which is currently set at February 1. With billions more to invest, the companies are hoping their combined weight can set the government on a different course.
Satish Meena, a New Delhi-based forecast analyst with Forrester Research Inc., said: “They are campaigning together against the new rules because these companies have over $20 billion at stake in the Indian market. At least another $10 billion investment will be made by these two companies in the next few years and this is the leverage they are trying to use.”
Dominion holds Amazon in its Global Trends Ecommerce Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.