India’s largest trading community – Confederation of All India Traders (CAIT) – has filed a petition with the Competition Commission of India (CCI) raising some serious objections.
According to the petition, Walmart will create an unfair competition and uneven level playing field and will indulge in predatory pricing, deep discounts and loss funding if it acquired Flipkart.
The petition further said that Flipkart is a combination of predation, exclusive tie-ups and of preferential sellers where even online vendors face discriminatory conditions and Walmart being the owner by virtue of 77 percent share is bound to give preference to its inventory.
The Walmart-Flipkart deal will annihilate small time traders on offline platform, the traders body said. This deal will create an unhealthy competition much to the disadvantage of both offline and online sellers. CAIT also apprehended that the Walmart-Flipkart deal has circumvented the existing laws and government’s FDI policy. “The ultimate object of Walmart is to enter the retail trade of the country and in the absence of any policy on e-commerce or retail trade, it would be easy for Walmart to reach out to retail market, which otherwise it cannot enter due to FDI policy,” the country’s largest trader body added further.
Capital is huge entry barrier (due to the manner in which the said market has evolved) and even established players would find it difficult to enter this market unless they are fine with burning cash, the traders body said.
In sum and substance, the Walmart-Flipkart deal would result in removal of several competitor or competitors in the market and would soften the competition, to a great extent, said CAIT. The traders body has also prayed to the competition commission to disallow the transaction between Walmart & Flipkart. The global retailer Walmart had acquired 77 percent stake in homegrown e-tailer Flipkart for $16 billion earlier in the month.