Paytm Hails Flipkart-Walmart Deal, CAIT Says Not Good For India!
Talks are already on about possible regulatory obstacles in finalizing the sale of Flipkart to Walmart.
As the excitement of Flipkart and Walmart deal is cooling down, reactions have started coming in from industry veterans, trade bodies, and even tax officials regarding this new development.
While Paytm founder Vijay Shekhar Sharma has hailed this mega-deal, offline trade body CAIT has slammed it.
Meanwhile, talks are already on about possible regulatory obstacles in finalizing the sale of Flipkart to Walmart.
And in an interesting development, retail czar from India, Kishore Biyani is in talks with both Walmart and Amazon for a possible sell-off of Future Group!
Walmart-Flipkart Deal Is Good For Ecosystem: Paytm Founder
The third major party in the e-commerce battle in India is Paytm, and now, their official reaction has come in.
Paytm founder Vijay Shekhar Sharma has described this deal as an ‘incredible outcome’, as he tweeted:
This is 1 Lakh crore+, all cash deal !
I call it, perfect answer to those who were dismissive of Indian startups in an open-for-all market. What an incredible outcome for every believer of @Flipkart . ?? https://t.co/uiG9gSTK7v
— Vijay Shekhar (@vijayshekhar) May 9, 2018
Earlier, when talks were on between Fiipkart and Walmart regarding this acquisition, Paytm founder Sharma had expressed that this was good for the overall startup ecosystem in India.
He had said, “This is the perfect example of perseverance, aggression and relentless hard-work,”
It will be interesting to note how Paytm counters the onslaught of Walmart in India now.
Trade Body: Walmart Is Bad For India!
Influential trade body of offline retailers and traders, The Confederation of All India Traders or CAIT has slammed the Walmart-Flipkart deal, and have described it as bad for India.
In a letter dated May 7th, Praveen Khandelwal, national general secretary, CAIT, said,
“Since there is no policy or rule for e-commerce as of now, such deals will run contrary to the interests of India’s retail trade… e-commerce business is already gripped with predatory pricing, loss of funding. The scenario after the Walmart-Flipkart deal will be worse than ever for both offline and online traders,”
Infact, CAIT has requested Indian Govt. for “immediate intervention”, and to ensure that predatory pricing and malpractices in ecommerce is not allowed.
Their negative reaction to Flipkart-Walmart deal was expected.
Regulatory, Geographical Challenges For Walmart Now?
Even as Walmart’s acquisition of Flipkart has resulted in over 100 Flipkart employees becoming millionaires, talks are already on regarding geographical and regulatory issues pertaining to this deal.
Walmart is already calculating how much tax they need to pay to the Indian Govt., even as Sachin and Binny Bansal are readying to cough up 20% capital gains tax on their billions of dollars which they received.
Vivek Mansingh, general partner, YourNest Capital Advisors Private Ltd said,
“Whenever, there is a large acquisition with some perceived risk by a large company – and of course there is risk in all business – shares of that company goes down. Having said that, in this deal there is a risk of a new geography (India).”
Walmart has said that they will comply with all regulatory requirements, before entering into India. FDI in B2C retail is still now allowed in India.
We will keep you updated.