Addressing fears of sellers and trader associations over the impact of the $16-billion Walmart-Flipkart deal, Kalyan Krishnamurthy, CEO of Flipkart wrote to sellers assuring them that there will be no changes in the operating processes post the deal.
In an email written to all sellers on the platform, Kalyan said that Flipkart will continue to be a marketplace where sellers from across the country and connect with customers.
“We will keep making deep investments int technology, innovation, supply chain and business processes to grow the ecommerce market even more in coming years, with the aim to increase the number of people shopping online, and the average spends,” he wrote, reiterating that Walmart and Flipkart will maintain separate operating structures, as well as distinct brands post the deal.
Ever since rumours about the deal got stronger, seller associations expressed their reservations towards the deal, fearing that it will lead to an uneven level playing field, causing domestic players to lose out.
Assuring sellers that they will continue to benefit, Kalyan wrote, “Our focus on making our sellers succeed will continue with the same vigour as in recent years. As you know, Flipkart has constantly optimised operations and passed on the benefits resulting from such efficiencies to sellers, this, empowering them to deliver an even more fulfilling experience to customers. With Walmart on board, we are committed to doing more of the same.”
Opposing the deal, the Confederation of All India Traders on Monday wrote to Commerce and Industry Minister Suresh Prabhu demanding a government scrutiny of the merger, claiming that the deal will encourage more loss-funding and predatory pricing by ecommerce majors. It also announced that it will closely study the metrics of the deal and move to the Government or appropriate Authority to seek a ban on the deal till the time all related issues are resolved satisfactorily.
The All India Online Vendors Association (AIOVA) too expressed its reservation over the probability of Walmart bringing in its own private labels via Flipkart to Indian consumers at hyper-competitive prices, which will cannibalise the market and make it difficult for other sellers to operate.
However, in the letter to all sellers, Kalyan wrote that Flipkart wants its sellers to succeed and thrice, and that it will continue to do everything to ensure that happens.
After the letter was sent on Wednesday, AIOVA acknowledge the letter but expressed its worry over advantage given to Walmart products on the website.
“How can we send sellers reservations and grievances to you? In your tenure as CEO, you have never made any approach to understand sellers grievances. Maybe a change of approach can be made,” it suggested to Kalyan through a tweet on Wednesday.
Walmart acquired 77% stake in Flipkart on Wednesday for $16 billion in a deal valuing the Indian ecommerce major at over $20 billion. While both companies claim that the deal will not bring about any major changes to the operations at Flipkart, Walmart is expected to lend its expertise to Flipkart in terms of logistics and supply chain while learning from Flipkart about running an ecommerce entity and how an ecosystem and the different pieces of it work and apply those learnings in other markets.