Walmart, in a separate response, said that on account of FDI restrictions, Walmart India can not engage in selling directly to consumers.

Walmart may repeat predatory behavior adversely affect competition CAIT to NCLATImage source: Mike Mozart via Flickr
Atom E-commerce Friday, October 05, 2018 - 10:47

In a reply filed before the National Company Law Appellate Tribunal (NCLAT) regarding the Walmart-Flipkart deal, told the tribunal that it was found in other markets such as Germany, Mexico and South Africa to claim that Walmart was resorting to predatory tactics and behaviour. As per a PTI report, CAIT fears that having taken over Flipkart, the combined might of the two will cause considerable damage to the small and marginal retailers in India since they will be unable to stand the money power that the online giants enjoy.

The appeal may come up for admission at the NCLAT on October 5.

In its response to some of the points raised by CAIT, Walmart International Holdings Inc, which is a subsidiary of Walmart Inc, has strongly defended its position. Some of the points included in its reply refer to the difference in the very basic model of business activities between it and the Indian company acquired by it.

Walmart claims that while its major thrust areas are groceries and food, a major portion of Flipkart’s revenues come from products like mobile phones and other electronic stuff. This is when comparing the business activities of Walmart in the B2B segment where it runs Best Price Modern Wholesale stores in eight states. Walmart has also pointed out in its response that the FDI regulations under which it operates, do not permit it to sell directly to consumers and that in terms of the share of the market in the segments they operate, the combined figure for Walmart and Flipkart would be less than 5% and should not be a cause for worry for any of the Indian traders.

While CAIT has given specific cases in the three countries mentioned above and how the regulatory authorities there had initiated punitive action against the company, Walmart’s response does not appear to have directly touched upon these examples. It may be recalled that CAIT had written to the CCI also when the application for Walmart’s buying 77% stake in Flipkart for $16 billion was under consideration, but CCI had said the points raised by CAIT do not directly fall within its jurisdiction and that the trade body must approach the other agencies to redress their grievances. CAIT has termed this stand of the CCI and it approval to the deal, ‘unfortunate’.

Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.