Amazon, Facing Unfavorable Regulatory Environment, Struggles To Expand in India

Amazon is lagging its chief rival Flipkart in India on several key metrics and struggling to make inroads in smaller Indian cities and towns, according to a scathing report by investment firm Sanford C. Bernstein. TechCrunch: The American e-commerce giant's 2021 gross merchandise value in the country, where it has deployed over $6.5 billion, stood between $18 billion to $20 billion, lagging Flipkart's $23 billion, the analysts said in a report to clients Tuesday that was obtained by TechCrunch.

India is a key overseas market for Amazon, where it competes with tycoon Mukesh Ambani's Reliance Retail, which launched grocery shopping on WhatsApp this week, Walmart-owned Flipkart and social commerce startups SoftBank-backed Meesho and Tiger Global-backed DealShare. Amazon has so far offered "a weaker proposition in 'new' commerce" in the country, the report added. At stake is one of the world's last great growth markets. The e-commerce spending in India, the world's second largest internet market, is expected to double in size to over $130 billion by 2025.

I kinda envy countries

[rsilvergun]

that protect their local businesses. Don't get me wrong, hyper nationalism is a terrible idea. During the Trump administration they blocked imports of baby formula, and we saw how that worked out. Modern supply chains like putting all their eggs in one basket, so the only way to prevent a catastrophe is with a consistent import supply. You can't just turn that supply on at the drop of a hat, businesses need time to ramp up supply because thanks to computers nobody has excess capacity. We don't have extra Ha

Re:I kinda envy countries

[ShanghaiBill]

that protect their local businesses.

This isn't about protecting local mom & pops. India is protecting corrupt politically connected conglomerates like the Ambani family's Reliance.

A generation ago, India and China had similar per capita incomes. Today, China is five times richer. India has tens of millions of hungry children. That is the price of corruption and protectionism.

Re:

[HiThere]

Actually, protectionism is plausibly good...if done properly.
The same can't be said about corruption. Or nepotism. (Or anti-nepotism, but that one rarely shows up.)

That said, doing protectionism properly is quite tricky. You should only protect local businesses to the extent that their foreign competition is subsidized...but measuring those subsidies is extremely difficult. To pick one example, how do you count laws restricting labor unions?

So while protection isn't is plausibly good in principle, findi

Re:

[pete6677]

"Nationalism is good, unless Trump does it, because Orange Man Bad."

The baby formula shortage BTW had nothing to do with Trump. It was caused by only 3 companies supplying the entire market. One of them had to take it's largest plant offline for a few months due to a contamination incident, which was enough to seize up the entire supply. Yet another reason why monopolies and near-monopolies are bad.

Good

[Going_Digital]

Finally some good news for once. Terrible company fails to ride roughshod over country, if only more countries would stand up to them.

Re:

[Tx]

Is Walmart so much better than Amazon?

Oh no!

[codebase7]

one of the world's last great growth markets

So there's still hope that the cancer, that is our economic policy, will finally run out of resources to consume and starve to death. Quick cover the shareholder's ears less they hear the news and go into a meltdown! /s

Re:

[Beyond_GoodandEvil]

So there's still hope that the cancer, that is our economic policy, will finally run out of resources to consume and starve to death. Quick cover the shareholder's ears less they hear the news and go into a meltdown! /s
Indeed tovarish, soon we will re-educate those kulaks in a great leap forward towards cultural revolution, what could possibly go wrong?

Unfavorable or fair?

[Revek]

If the decks not loaded in their favor that is unfavorable to them.

Re:

[HiThere]

That it would be unfavorable isn't difficult to believe, but the summary didn't go in just how it was unfavorable. So it may also be just a PR claim.

Isn't Flipkart just another name for Walmart?

[AlexanderPatrakov]

So the whole subject suddenly becomes: why does one American company (Amazon) struggle in India, and another one (Walmart/Flipkart) doesn't?

India forbids Americans from owning assets or IP.

[pimpsoftcom]

India actively forbids Americans or companies from outside of India from owning property, stocks, real estate, or any kind if Assets or IP in India.

They do this intentionally because they recognize that they are parasitic and only getting money from these other countries, and have no interest in supporting other countries. But the side effect is, you cant invest in the country, because you cant make money unless the local agent you give the assets to (yes that happens, people just are given assets to manag