Flipkart and Amazon Face Fall-Out Over Indian Law Changes

After being forced to remove up to a quarter of its product listings from its Indian-based platform to comply with the country’s new e-commerce legislations, Flipkart sellers have been popping up on Walmart’s Canadian site.

Walmart, who acquired Flipkart for US$16 billion in May 2018, is feeling the heat since India introduced new laws for online marketplaces operating within the region, stipulating that marketplaces could no longer sell products via companies in which they have an equity interest.

An analysis from consulting firm Technopak suggested that Flipkart would need to pull up to 25 percent of its inventory from its live site to remain compliant.

As stock is disappearing from its Indian marketplace, however, Walmart is reportedly adding Indian sellers to its Canadian platform, with products from Flipkart-owned Indian fashion brand, Myntra appearing on its Canadian e-commerce site.

This is just one move Walmart has made since acquiring Flipkart to enhance the business’s global reach. The company does have a lot of work ahead of it if it wants to appease investor concerns, with rumours circulating soon after the purchase that Walmart wouldn’t be able to leverage Flipkart as a profitable asset.

According to the Co-Founder of Toronto-based, Retail Advisors Network, Walmart needs to find ways to monetise Flipkart, and fast.

“They’re going to have to find ways of monetizing the Flipkart acquisition, and it shows their investors that they’re trying to leverage this new asset,” he said. “Maybe Myntra is the beachhead, and then they may invite other [Indian] sellers to drive more volume.”

Amazon has also been impacted by the February 1 law changes, removing more than 400,000 products from its Indian marketplace. Since the global platform stopped selling products from businesses it has a stake in, the India Times has also reported that more than a dozen small sellers have exited the platform, or suspended their accounts as they are unable to manage logistics and deliveries without the assistance of Amazon-owned Cloudtail and Appario.

Amazon, however, is remaining level-headed despite the updates, assuring both sellers and buyers that its marketplace is as strong as ever.

“Amazon remains committed to enable a large number of sellers (400,000+ sellers) on its marketplace to offer the widest selection to our customers,” an Amazon India spokesperson said. “We have introduced several initiatives and services such as Easy Ship and Service Provider Network to ensure a robust marketplace for sellers of all sizes to sell and grow. We continue to work backwards from seller needs and offer services.”

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