The confederation’s petition to the CCI objected to the deal and said that Walmart “will create an unfair competition and uneven level playing field and will indulge in predatory pricing, deep discounts and loss funding”.
CAIT further said that “Flipkart is a combination of predation, exclusive tie-ups and of preferential sellers where even online vendors face discriminatory conditions and Walmart being the owner by virtue of 77 percent share is bound to give preference to its inventory”.
“There will be denial of market access to non preferred sellers coupled with complete annihilation of small time traders on offline platform,” the confederation said in a statement.
According to CAIT, Walmart will sell its inventory on Flipkart’s platform either directly or through a web of associated preferred sellers which will negatively impact pure offline retailers or wholesalers.
“… Offline retailers or wholesalers would have two options either exit the market or sell their goods on Flipkart.com and face discriminatory terms and conditions from Flipkart.com in comparison to its preferred sellers,” CAIT’s statement said.
“This will create an unhealthy competition much to the disadvantage of both offline and online sellers.”
Besides, it said that capital is a “huge entry barrier and even the established players would find it difficult to enter this market unless they are fine with burning cash”.
“In sum and substance, the said transaction would result in removal of several competitor or competitors in the market and would soften the competition, to a great extent,” the statement added.
On May 9, global retail giant Walmart Inc announced it was buying 77 per cent equity stake in the country’s largest e-tailer Flipkart for $16 billion, subject to regulatory approval in India.
The acquisition of the majority stake makes the $500-billion Walmart the largest shareholder of Flipkart group and will help accelerate its mission to transform e-commerce through digital technology.