Should Jeff Bezos worry about India?
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Friday
February 03, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
FRIDAY, FEBRUARY 03, 2023
Should Jeff Bezos worry about India?

World+Biz

Andy Mukherjee
17 January, 2020, 07:00 pm
Last modified: 18 January, 2020, 11:37 am

Related News

  • Indian shares set to rise on easing inflation concerns; Adani stocks in focus
  • PM likely to attend G20 Summit in New Delhi September
  • Indian shares struggle for direction as Adani rout deepens
  • Australia batter Usman Khawaja flies out to India after visa approved
  • India raises defence spending by nearly 13 per cent to ₹5.94 lakh crore

Should Jeff Bezos worry about India?

Even if the antitrust probe his company faces doesn’t amount to much, Amazon should be looking over its shoulder

Andy Mukherjee
17 January, 2020, 07:00 pm
Last modified: 18 January, 2020, 11:37 am
Should Jeff Bezos worry about India?

Jeff Bezos is in India at an awkward moment. Just before his visit, the country's antitrust authority ordered a probe into the business practices of its two main American-owned shopping websites. One of them is his.

How worried should the Amazon.com Inc. boss be?

If the Competition Commission's recently released study on e-commerce is any guide, Bezos shouldn't lose any sleep over the $6.5 billion he has committed so far — including $1 billion just this week — to win the only billion-person market that's open to Western tech firms.

The document, which forms the basis for the antitrust investigation, has much fodder for action, but nothing that hasn't already been chewed over.

Amazon India and Walmart Inc.-owned Flipkart Online Services Pvt. are required to be neutral online marketplaces. Sellers they own can't offer goods on their websites. That's the law, and sure enough, last year Bezos hastily sold a big chunk of Amazon's stake in Cloudtail, its top Indian partner, to stay on the right side of it.

Flipkart, too, found a way to tiptoe around the requirement that foreign-owned platforms only facilitate e-commerce; they aren't allowed to control inventory or influence prices.

Yet many small retailers, who compete online, believe their products are outgunned in customer searches by preferred sellers — such as  Cloudtail and Appario Retail Pvt for Amazon and OmniTech Retail India Ltd. for Flipkart — and their heavily discounted offerings. Here's how the Competition Commission's study frames the problem: 

"The price points at which these sellers sell the products on the marketplace platforms are in many instances lower than the cost price for the brick-and-mortar retailers. These retailers maintain that, therefore, they either have to match the online discounts at a significant loss or the online market would be foreclosed for them.

This was pointed out to be a particularly pressing concern in the case of mobile phones, where online markets constitute around 40% of the total sales in the country."

With a traders' association announcing sit-ins and protest rallies in 300 cities, Bezos understands the need to manage the anger of stakeholders in an important market. At a summit of sellers in New Delhi on Wednesday, he announced a fresh $1 billion investment to help bring small businesses online.

To political authorities, Amazon wants to demonstrate the social usefulness of e-commerce by committing to export $10 billion of made-in-India goods by 2025. 

Can the competition investigation upend existing business models? There's a hint of a stick in the watchdog's study, which notes that, "Any potentially anti-competitive unilateral conduct of platforms or platforms' vertical arrangements with sellers/service providers will receive enforcement attention."

Yet, in closing, the commission just asks the industry to police itself by working on things like describing search-ranking parameters "in plain and intelligible language."

It'll be unrealistic to expect anything more dramatic from the formal inquiry. After all, the final customer isn't complaining. She would rather receive a bigger discount on a new mobile phone than ask why it's being exclusively sold online. 

The Coming Churn

Even by 2021, India's $1.2 trillion-a-year retail market will be dominated by mom-and-pop shops. Mukesh Ambani wants to link them with customers of his mobile services network

Source: Deloitte, Unraveling the Indian Consumer

More than any antitrust order, the real challenge for Bezos will come from "phygital" retail, a combination of physical and digital commerce that Mukesh Ambani, Asia's richest man, is currently piloting. Ambani's ambition is to link up 30 million neighborhood stores to the 360 million-plus customers of his 4G telecom network, Jio.

If he can dominate grocery and fast-moving consumer goods by offering discounts, cashless payment, in-store credit and the convenience of home delivery, small shops around the country could become one gigantic storefront for his JioMart.

If they share their purchase, sales and inventory data with Ambani, they may even get to enjoy lower borrowing costs from banks and nonbank financiers. They won't be as independent as they now are, but they will be bigger and more profitable, and more competitive against pure e-commerce. 

This future isn't too far away. The takeaway for the antitrust authority is that they can't put up new restrictions on Amazon and Flipkart based on the 7% of a $1.2 trillion retail market that's gone online.

Major changes are afoot in the remaining 93% of the industry that's currently offline. Wait for the churn that comes after JioMart goes live. Bezos, too, will be waiting.

Top News

Jeff Bezos / India

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Gautam Adani. Photo: Bloomberg
    Adani’s $108 billion crisis shakes investors’ faith in India
  • International Monetary Fund logo : AP via UNB
    IMF sets time-bound reform agenda as it releases first tranche of loan
  • Shipped Bhola gas to cost higher, yet cheaper than spot LNG
    Shipped Bhola gas to cost higher, yet cheaper than spot LNG

MOST VIEWED

  •  Justice Minister nominee Cho Kuk attends a hearing at the national assembly in Seoul, South Korea, September 6, 2019. REUTERS/Kim Hong-Ji
    S Korea's ex-justice minister sentenced to two years in jail
  • Pakistan 'will have to agree' to IMF conditions for bailout: PM Shehbaz Sharif
    Pakistan 'will have to agree' to IMF conditions for bailout: PM Shehbaz Sharif
  • Humanitarian aid: EU releases over €43 million for Myanmar and Bangladesh
    Humanitarian aid: EU releases over €43 million for Myanmar and Bangladesh
  • Photo: Collected
    Australia to legalise MDMA and magic mushrooms for medical use
  • Gautam Adani. Photo: Bloomberg
    Adani’s $108 billion crisis shakes investors’ faith in India
  • FILE PHOTO: A group of women hold torches as they protest against the military coup in Yangon, Myanmar July 14, 2021. REUTERS/Stringer/File Photo
    Myanmar junta imposes tough new measures on resistance strongholds

Related News

  • Indian shares set to rise on easing inflation concerns; Adani stocks in focus
  • PM likely to attend G20 Summit in New Delhi September
  • Indian shares struggle for direction as Adani rout deepens
  • Australia batter Usman Khawaja flies out to India after visa approved
  • India raises defence spending by nearly 13 per cent to ₹5.94 lakh crore

Features

Andy Mukherjee. Sketch: TBS

What makes India's billionaires' support special for Adani

4h | Panorama
Photo: Rejaul Hafiz Rahi

A jackal farewell

5h | Earth
The trio spearheading the revival of book cover designs

The trio spearheading the revival of book cover designs

6h | Panorama
Six Jeep Wranglers and a special XJ Jeep Cherokee set out into the depths of Lalakhal, Sylhet for an experience of a lifetime. Photo: Ahbaar Mohammad

Jeep Life Bangladesh: A club for Jeep owners to harness the power of their vehicles

1d | Wheels

More Videos from TBS

A proper price formula can help investors to plan big

A proper price formula can help investors to plan big

20h | TBS Round Table
Rumors about Sarika that everyone thinks are true

Rumors about Sarika that everyone thinks are true

18h | TBS Entertainment
Mugging rife in Tejgaon, murder in Wari

Mugging rife in Tejgaon, murder in Wari

21h | TBS Current Affairs
What secrets are hidden behind Adani's wealth?

What secrets are hidden behind Adani's wealth?

19h | TBS Stories

Most Read

1
Bapex calls candidates for job test 9 years after advert!
Bangladesh

Bapex calls candidates for job test 9 years after advert!

2
Leepu realised his love for cars from a young age and for the last 40 years, he has transformed, designed and customised hundreds of cars. Photo: Collected
Panorama

'I am not crazy about cars anymore': Nizamuddin Awlia Leepu

3
Photo: Collected
Energy

8 Ctg power plants out of production

4
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington, U.S., September 4, 2018. REUTERS/Yuri Gripas/File Photo
Economy

IMF approves $4.7 billion loan for Bangladesh, calls for ambitious reforms

5
Photo: Collected
Court

Japanese mother gets guardianship of daughters, free to leave country

6
Fund cut as Dhaka's fast-track transit projects on slow spending lane
Infrastructure

Fund cut as Dhaka's fast-track transit projects on slow spending lane

EMAIL US
[email protected]
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - [email protected]

For advertisement- [email protected]