CAIT fears Walmart may repeat predatory behaviour in India too

According to traders' body The Confederation of All India Traders (CAIT), Walmart that has been found "guilty of predatory behaviour" in countries like Germany, Mexico and South Africa "may repeat such behaviour in India" through its acquisition of online major Flipkart. CAIT has told this while filing its appeal before NCLAT and challenging the CCI's approval of Walmart's USD 16 billion acquisition of Flipkart. It further said that the US retail major "may cause an appreciable adverse effect on competition" in the domestic market post combination as its "predatory tendencies".

Walmart International Holdings in its reply has said that its business model and activities in India were different of Flipkart's. Moreover, taking into account the FDI restrictions, Walmart India cannot engage in selling directly to consumers.

Even in business segments, where there is an overlap with Flipkart, Walmart said the "combined market share of Flipkart and Walmart in the market of B2B sales are less than five per cent and the incremental change in the market shares as a result of this transaction is less than 0.5 per cent".

"... the product line for the parties are largely different. While Walmart India's focus is on food and grocery products, Flipkart B2B entities major sales are in mobile, other electronic and lifestyle, which are an extremely small part of Walmart India portfolio."

Walmart further said that the FDI policy 2017 restricts Walmart to do B2C sales whether offline or online as seller or any end-consumer market place based e-commerce platform, including on Flipkart marketplace platforms, which also includes Myntra, Jabong and ebay.in.

On September 6, the NCLAT, an appellate authority over the Competition Commission of India (CCI) has asked Wal-Mart International Holdings Inc. to file a reply by explaining its way of doing business in India. CAIT was also asked to file its understanding over the Walmart's business model in India.