As India plans to democratize e-commerce, Amazon and Walmart are in a difficult situation. Beijing’s determination to shrink China’s private sector through ruthless regulatory measures has aroused the interest of the investment community. This is good news for New Delhi: it has performed more subtle operations in the same direction. They were almost ignored.
Even if Amazon and Walmart’s Flipkart consider draft e-commerce rules aimed at restricting the online market. They will certainly feel the temperature rise-not only in their market, but also in their market itself. Super-app India was planned by the Tata Group. “A new existential threat is at hand: an open, state-sponsored digital retail network. The Ministry’s press release stated that the Minister of Trade Piyush Goyal has set up a committee to Serve as chairman to “democratize digital commerce” and “provide alternatives to proprietary e-commerce sites.”
In China, local companies such as Taobao, Tmall, and JD.com firmly dominate online retail. But now the only other billion-dollar opportunity open to US capital is gradually moving away from it. According to the press release, the template is a nationally successful unified payment interface. It is a government service that allows any company to process payments in real-time via a smartphone while complying with many common agreements. The UPI network quickly replaced proprietary card payments.
Designing such an open network for online transactions will be much more difficult because it is easy to come up with a set of rules whose goal is to satisfy the central bank so that the same funds will not be reused. Means more confusing results. Did the consumer receive the product they paid for? Did he arrive safely? Is the item real or fake? Is it possible to comply with the right of return? In addition, brands selling online have to worry about the solvency of dealers and their ability to handle complex distribution logistics in a country with weak physical infrastructure.
The ministry stated that businesses can save their data on the open Internet to obtain credit records and reach consumers. Several questions have arisen: Amazon and Wal-Mart Flipkart account for less than 10% of India’s $800 billion retail sales. Are they lagging behind innovation so that the harm exceeds the positive impact of aggregate demand? Managing their commercial shipping processes according to some pre-established rules weakens their ability to determine what is happening on the platform where they have invested billions of dollars. Like other places, India also has the risk that the dominant market will copy the ideas of retailers and display them as their brands. However, is this threat currently sufficient to ensure that the system is downgraded to an earlier version of the platform?
Without permission to own inventory, these two dominant overseas markets have solved many potential trust issues by hiring a small number of large sales personnel to control them. This practice, considered discriminatory by some trader groups, is now attracting attention in India. The research was so intense that Amazon’s joint venture with Indian software mogul Narayana Murti decided to close it in the middle of next year. Note: Cloudtail has helped relatively small manufacturers such as the saree brand in Rajasthan to achieve national influence on Amazon, which they may not be able to achieve by themselves.
Consumers have more choices than ever before. Maintaining customer satisfaction ratings on Amazon can be difficult because India intends to reduce its focus on platform models, including the Tata Group. It plans to establish a market that covers fashion, lifestyle and electronics. If you cannot sell a cup of Starbucks coffee on their website, you may be at a disadvantage. It cannot be a related party of the seller stipulated in the draft e-commerce rules. The same is true for Walmart Inc.’s independent wholesale department. As an affiliate of Flipkart, you may not be able to sell shirts on retail websites.
The winner may be someone who uses a different business model to add consumables. India’s richest man, Mukesh Ambani, controls the largest convenience store chain and the largest telecommunications company. Reliance Industries Co., Ltd. owned by Ambani, with its $180 billion balance sheet, can have its inventory to buy and store in third-party products, and view their online or offline or sell hybrid offline configuration. The Ant Group’s recent mandatory reorganization of the United States’ historic move to separate coal from railways, companies from banks, and television broadcasters from programs occurred in a completely different era, namely the blockade interrupted by ATandT Inc. in 1982, but the pendulum once again fluctuated. Nahan, president-elect Biden chaired the Federal Trade Commission, is actively advocating a more muscular approach to technology platform management.
This ever-changing zeitgeist provides New Delhi with the perfect disguise to attract its killer Amazon, even though digital commerce is currently only a side event in India. Greater anti-competitive forces are playing a role in all sectors from telecommunications to ports to airports. Invent non-existent problems, rather than solve existing problems. An open digital trading network is one of the solutions to the problem. The decline of the platform economy will bring huge advantages to retailers who are allowed to own inventory. It may be more efficient, but not necessarily more competitive.