The traders body, Confederation of All India Traders (CAIT), has sent a letter to the Commerce and Industry Minister Suresh Prabhu seeking government intervention in the Flipkart-Walmart deal as it may result in predatory pricing and malpractices. But experts suggest that government is most unlikely to act upon CAIT's request since such an intervention by the government would be against free trade and may adversely affect healthy competition in the e-commerce segment. The traders body has also stated that the government should frame an e-commerce policy before allowing such deals.
“It is unlikely that the government will act upon such requests. There is no doubt that the offline traders are facing stiff competition from online players and there is a clear trend that online is cannibalising the offline market in India. But the question is that why the government should interfere in only one deal and discourage free competition in the e-commerce segment. If the government had to interfere, it would have done that till now. Though the request has come from CAIT, there must definitely be many large retailers who may be behind this move as many large format retail store chains are feeling the heat due to the online penetration in India,” Alok Shende of Mumbai based Ascentius Consulting told THE WEEK.
As per media reports CAIT had argued that the government should make it mandatory that such deals could take place only when 75 per cent of the sellers on an e-commerce platform give their assent.
On the other hand experts such as Kris Lakshmikanth of Head Hunters India Limited feels that the government seems to have blessed this deal and Prabhu is expected to lie low on such requests. “Such kind of deals will surely be a blessing in disguise for customers as they will be able to get goods at much lower rates and people will be able to buy on Flipkart and get their delivery through Walmart. Off late there are many large format retail chains that have suffered a dip in sales such as Shoppers Stop and even the large format book stores have shrunk in size as people are buying books online in large numbers. Even I have seen bookshops at airports and other major areas have shrunk in size and usually have very less people frequenting them. Organised retail will surely see a dip in India by mid 2020's,” remarked Lakshmikanth.