Walmart and Amazon making big mistakes in India
Sunita Agarwal, Pune
Apr. 4, 2019

Image credit: CNBC Television: https://www.youtube.com/watch?v=xCjxsjsKAnk

Indian market is very different. People in India have different long term attitudes that Mukesh Ambani knows very well. What worked in US and somewhat in China may fail badly in India.

The biggest challenge is the real democracy where people are eager for the Government to to take care of the common people (aam admi). Recently US-based corporations Amazon and Walmart, which owns 77% stake in Flipkart lost close to $50 billion in market value as Government of India changed ecommerce policies affecting the profit margins of Amazon and Walmart.

The US companies are now executing a plan to more than double the store front effects by supplying small stores with merchandises instead of competing with them. East India company of UK tried these tricks centuries back. They lost badly and finally decided to take on the Governments of India and making India a colony of England. The Kings of India were extorting the British regularly in terms of added taxes till they lost their independence.

This time it is a very different scenario. India is a nuclear power with a very educated middle class population and third largest economy poised for becoming number one by 2050. Eventually Facebook, Amazon, Walmart, and Google will have serious conflict with elected Indian Government's policies that will protect India's interest. In addition Government of India will favor Mukesh Ambani and like making it impossible for Facebook, Amazon, Walmart, and Google to make any significant money from India.

It has been a common naive practice by US companies like Google, Pepsi, and Microsoft to put Indian origin persons at the top as a front end show case to penetrate Indian market. It may not work. Pepsi learned that in the last twenty years. Others will learn that sooner or later.

India is no longer a divided bunch that can be conquered with immense amount of money. People of India are smart and shrewd. They will like Amazon, Facebook, and WhatApp as long as things are free. There is a limit of providing free stuffs in a vast economy. When the business models are ready to utilize the branding created to make money, Government of India will step in and these American companies will start staring at US Administration for counterbalancing actions.



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