Flipkart and Amazon dominate in India

India’s antitrust regulator is evaluating the domestic e-commerce sector, a step that could have consequences for Inc. and Flipkart of Walmart Inc., which dominate online sales in the country.

In a May 17 questionnaire, the Competition Commission of India says it is trying to understand the evolution of the e-commerce industry, the methods and strategies of the sector, business practices and the “implications for competition”, according to a copy reviewed by The Wall. Street newspaper. Ernst & Young is carrying out the study, according to the 14-page document, which is marked as confidential.

The questions cover the percentage of products sold by categories, inventory practices, how price decisions are made and the total volume of sales, among other topics.

“What if tomorrow Amazon takes over Flipkart controlled by Walmart or vice versa? Would not there be a complete monopoly? This should be verified,” said an official with the Ministry of Corporate Affairs of India who declined to be named. The ministry oversees the Competition Commission.

A spokesperson for the Competition Commission of India did not respond to a request for comments on the questionnaire on Tuesday. Representatives in India of Ernst & Young, Amazon and Flipkart did not respond immediately to requests for comments.

Hoping to emulate China’s success in promoting local technology companies, Indian policymakers have been discussing in recent months ways to restrain American players in what many consider the world’s largest untapped technology market. world.

“They are recovering from global trends, discussions about how online markets dominate sales,” said Satish Meena, an e-commerce analyst at the Forrester research firm.

Last year, New Delhi established a clearer set of rules for electronic commerce that forced Amazon and Flipkart to adjust their operations. In addition, the country’s telecoms regulator has considered new policies that could force WhatsApp from Facebook Inc. and other social media platforms to allow authorities to read encrypted messages between users for reasons of national security.

Flipkart, which Walmart acquired for $ 16 billion last year, has approximately 38% market share in India, according to Forrester. Amazon, which is investing $ 5 billion to expand its operations here, has about 31% of the market, the research firm said.

India’s e-commerce industry is still small compared to the US. or China, but it is expected to grow rapidly as more consumers connect online, thanks to mobile phones and low-cost smart data. India’s online retail market was valued at $ 26.9 billion in 2018, but should increase to $ 84.6 billion in 2023, according to Forrester.

It was not possible to determine which e-commerce companies have received the antitrust regulator’s questionnaire. A disclaimer in the document says that it is “purely a research exercise to develop a clear understanding of the role of electronic commerce in India.”

The Competition Commission has also been investigating whether Google of Alphabet Inc. used the dominant position of its Android operating system to block its rivals in India, according to an official with knowledge of the matter. Google has said that Android has led to “more competition and innovation, not less.”

Last year, the Ministry of Corporate Affairs convened a panel to review the country’s competition rules “in light of changes in the business environment and bring necessary changes, if necessary,” the agency said at the time.

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