As per announcement of Indian Prime Minister Mr. Narendra Modi, FDI is to be consider in the space of e-commerce makes many companies little grouchy but not all of them. India’s one of the biggest online retail platform i.e; Flipkart is one among all who has opposed the saying that Foreign Direct Investment (FDI) being issued in Indian Internet Marketing. As per Flipkart’s saying this engagement will help only one international player i.e; a direct attack on Amazon.
Views in Support of Flipkart:
A FlipKart spokeswoman said, ”This effort will only be beneficial for a company(Amazon) that is being already doing well in Indian e-commerce platform and willing to make its place with the help of inventory based model of the country.”
Amazon is a Bangalore-based firm, which was initially started as an e-retailer and later on become successful while converting its business model to become a well established “marketplace” in past years. The global giant Amazon is trying to enter the rapidly growing E-commerce market, but as per India’s FDI policy restriction, the company was not able to completely operate in such a way that it is operating their business in the major countries like United States and United Kingdom.
Efforts made by International Player:
The international players like Amazon and ebay has gone for discussion with Indian Government Officials in favor of leniency on FDI restrictions. As per description of Indian Law, Amazon is not allowed to operate their business as inventory suppliers and holders. In spite of this, the firm has been forced to work as per the marketplace model in order to make continuation of their operation across the country.
As per the opinion of experts, major Indian e-commerce companies like Flipkart and Snapdeal, which are already $1 billion companies and command 80 per cent market-share, should not be opposing FDI as they themselves are backed by foreign private equity entities.
However, in the year of 2009, before the entry of Amazon across the country, Flipkart is in the favor of welcoming FDI in Indian Online retail market. Then question arises, What will be the reason behind opposing of this appraisal? The answer is quite simple as observed by e-commerce experts that, If Foreign Direct Investment (FDI) is allowed on internet marketing then the global giant Amazon will become able to take responsiblity for its selling its own products in the country making an adverse impact on Flipkart’s new marketplace strategies. This is the reason for increasing business competition among these companies.
