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Old 5th February 2019, 23:14   #31
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Re: New FDI norms stop e-tailers from selling products of companies they own

I think lots of people here haven't realised what Amazon and the likes are doing to the world of business. They are systemically destroying every other business until only Amazon is left. After that we are all at the mercy of Amazon, a foreign MNC. Government is basically trying to stop this, before it is too late.

You guys must see this video:


Last edited by Samurai : 5th February 2019 at 23:18.
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Old 6th February 2019, 01:37   #32
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Re: New FDI norms stop e-tailers from selling products of companies they own

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Originally Posted by Samurai View Post
I think lots of people here haven't realised what Amazon and the likes are doing to the world of business. They are systemically destroying every other business until only Amazon is left. After that we are all at the mercy of Amazon, a foreign MNC. Government is basically trying to stop this, before it is too late.
How does it matter to a consumer whether the money is in the pockets of an Ambani or a Bezos? Foreign MNC - so what?
I do not have enough trust in the Govt. to think of it's citizens first, especially in the current times. All they are every worried about is how they win elections which is by funding and who funds them is an open secret.

Your point of destroying every other business is however a point. And usually the answer to it is the protection of the SME sector. Again, here Amazon & FK were great channels in which if someone had a great product, it could reach millions - if you try and scuttle the investment itself, those players will never have a chance to grow.
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Old 6th February 2019, 04:49   #33
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Re: New FDI norms stop e-tailers from selling products of companies they own

Morgan Stanley says Walmart may exit Flipkart.

Link

What a bunch of losers, when the going got tough (because rules became fair) the strongest & most experienced players chose to cut losses & walk away!

I guess their PR couldn't negotiate with the Govt to let them circumvent the rules (thru 3rd party shell companies).
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Old 6th February 2019, 06:57   #34
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I don't think that 'free market' is a good defence against this ruling of Indian government.
What these marketplaces were doing was anti competition in nature.
The government ruling is pro competition.
ECom and physical stores like Dmart or even hyperlocal ECom platforms like Grofers can't/shouldn't be treated the same way due to the model of their businesses. That's why there are different rules for them.
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Old 6th February 2019, 09:12   #35
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Re: New FDI norms stop e-tailers from selling products of companies they own

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Originally Posted by Samurai View Post
I think lots of people here haven't realised what Amazon and the likes are doing to the world of business. They are systemically destroying every other business until only Amazon is left. After that we are all at the mercy of Amazon, a foreign MNC. Government is basically trying to stop this, before it is too late.
Come on Samurai - I know you are not that Naive - Most private sector companies would do the same if they had that chance - Look at what Jio is doing in the telecom sector. I agree govt regulations should prevent monopololies, but as customers, we will get screwed just the same by all monopolies - both videshi and swadeshi.
One good thing the videshi companies bring is the professionalism in their operations, which are solely lacking in the "chalta hai" attitude of their Local counterparts - Look no further than Amazon vs Flipkart or Uber Vs Ola.

Last edited by greenhorn : 6th February 2019 at 09:14.
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Old 6th February 2019, 10:17   #36
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Re: New FDI norms stop e-tailers from selling products of companies they own

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Originally Posted by pratyush6 View Post
Your point of destroying every other business is however a point. And usually the answer to it is the protection of the SME sector. Again, here Amazon & FK were great channels in which if someone had a great product, it could reach millions
But Amazon was also systematically killing the SME by replacing them with their own competing product after learning all about the product.

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Come on Samurai - I know you are not that Naive - Most private sector companies would do the same if they had that chance
Yes, they would. That is why governments everywhere have anti-trust laws. Without regulation, rich MNCs can single-handedly destroy the economy of a country and then move on to some other place.

You are looking at this only from end consumer point of view. But that is a very short term thinking. When amazon/flipkart are killing all competition by under-cutting them on prices, you are thinking "Aha, good for the customer...".

Let's say Amazon ends up owning almost all the businesses that sell on Amazon. That also means most third party businesses are now suppliers to amazon, and amazon is practically the sole buyer of most products and services. It is called a monopsony.

1) Amazon can dictate prices on both ends now, consumer and vendor. All the vendors will have to survive on razor thin margins or perish. Even consumer doesn't have a choice since there is only one seller.
2) Amazon can decide to switch to vendors from China because they are cheap. Overnight all vendors in India will be bankrupt.

Now, some of you may not care about vendors in India. But they are the ones who employ majority of the customers of Amazon, including many of you.

You may love your inexpensive TV/smartphone today, but it might be coming at the cost of losing your job in the coming years.

This is not a new phenomena. Walmart did this before for retail businesses. Now amazon is doing it for everybody else.

Last edited by Samurai : 6th February 2019 at 10:19.
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Old 6th February 2019, 11:15   #37
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Re: New FDI norms stop e-tailers from selling products of companies they own

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This is not a new phenomena. Walmart did this before for retail businesses. Now amazon is doing it for everybody else.

Quote:
History has shown that suppliers suffer if they run afoul of Wal-Mart. Rubbermaid raised the prices it charged Wal-Mart in the mid-1990s because of an 80% jump in the cost of a key ingredient in its plastic containers. The retailer responded by giving more shelf space to lower-priced competitors, helping drive Rubbermaid into a 1999 merger with rival Newell, says John Mariotti, a former Rubbermaid executive. "Rubbermaid earned Wal-Mart's wrath by not giving it the best deal," he says.
https://usatoday30.usatoday.com/mone...rtnation_x.htm
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Old 6th February 2019, 11:22   #38
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Re: New FDI norms stop e-tailers from selling products of companies they own

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2) Amazon can decide to switch to vendors from China because they are cheap. Overnight all vendors in India will be bankrupt.
This can be controlled via regulation. Actually, we have a similar regulation when it comes to FDI in single brand retail stores (Ikea, Starbucks etc). Some 30% of merchandise / goods has to be sourced from India.

https://www.thehindubusinessline.com...le10033495.ece
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Old 6th February 2019, 11:40   #39
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Re: New FDI norms stop e-tailers from selling products of companies they own

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Some 30% of merchandise / goods has to be sourced from India.

https://www.thehindubusinessline.com...le10033495.ece
That is precisely the reason why industry bigwigs like Apple have struggled to open their own retail stores. It is very difficult to satisfy the 30% indigenous sourcing from Indian entities when it comes to items like those which Apple sell. Till this day, Apple retails through other distributors such as Imagine.
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Old 6th February 2019, 11:46   #40
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Re: New FDI norms stop e-tailers from selling products of companies they own

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This can be controlled via regulation. Actually, we have a similar regulation when it comes to FDI in single brand retail stores (Ikea, Starbucks etc). Some 30% of merchandise / goods has to be sourced from India.
Yes, it can be. But most folks in this thread don't want government to interfere in business. Besides, that alone doesn't address monopsony.

Last edited by Samurai : 6th February 2019 at 11:49.
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Old 6th February 2019, 11:59   #41
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Re: New FDI norms stop e-tailers from selling products of companies they own

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That is why governments everywhere have anti-trust laws. Without regulation, rich MNCs can single-handedly destroy the economy of a country and then move on to some other place.

You are looking at this only from end consumer point of view. But that is a very short term thinking. When amazon/flipkart are killing all competition by under-cutting them on prices, you are thinking "Aha, good for the customer...".

Let's say Amazon ends up owning almost all the businesses that sell on Amazon. That also means most third party businesses are now suppliers to amazon, and amazon is practically the sole buyer of most products and services. It is called a monopsony.
I believe a version of this is well underway in the US. So many iconic retail houses have been shutting down for good - Macy's, Dick's sporting goods, K-Mart, Sears... Malls have been closing down too across the US and now serve as deserted strips for skateboarders and junkies.

In financial terms, the market shares and the revenues of most major retailers have been going down while only Amazon's market cap has been going up. Correlation is not causation, sure, but you know what's going on there.

The thing about the Retail sector in the US is that along with the transportation & logistics sector, they provide the only jobs of last resort. Globalization's victims, thrown out of white and blue collared jobs in the past 30 years, have all been retail clerks and warehouse employees. Amazon is hitting them hardest of all. The free market is really unfair to the little man on the street if you think about it.

Last edited by locusjag : 6th February 2019 at 12:01.
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Old 6th February 2019, 12:31   #42
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Re: New FDI norms stop e-tailers from selling products of companies they own

I'd rather have the greedy market decide what I can buy and cannot than some self-righteous babu who thinks he has figured out what is best for the world.
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Old 6th February 2019, 12:35   #43
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Re: New FDI norms stop e-tailers from selling products of companies they own

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The free market is really unfair to the little man on the street if you think about it.
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Originally Posted by Samurai View Post
Yes, they would. That is why governments everywhere have anti-trust laws. Without regulation, rich MNCs can single-handedly destroy the economy of a country and then move on to some other place.
Boy I'm really glad there are still people who think this way. Every millennial I come across is aggressively for unbridled-capitalism. Of course it's easy to be for a particular system when you are the beneficiary of the genetic lottery (ie the middle-class or upper-middle-class family who you were born into) that places you to best take advantage of that system.

Last edited by am1m : 6th February 2019 at 12:36.
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Old 6th February 2019, 12:57   #44
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Re: New FDI norms stop e-tailers from selling products of companies they own

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... Every millennial I come across is aggressively for unbridled-capitalism. Of course it's easy to be for a particular system when you are the beneficiary of the genetic lottery (ie the middle-class or upper-middle-class family who you were born into) that places you to best take advantage of that system.
Tangential but related point, the same millennial expects a 50% salary bump when changing jobs every 2 years so their 'lifestyle' can be maintained, and unironically believes the 'market' will ensure they get it. The same market they're skewing into unsustainability but they neither understand not care.
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Old 6th February 2019, 13:05   #45
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Re: New FDI norms stop e-tailers from selling products of companies they own

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Boy I'm really glad there are still people who think this way. Every millennial I come across is aggressively for unbridled-capitalism. Of course it's easy to be for a particular system when you are the beneficiary of the genetic lottery (ie the middle-class or upper-middle-class family who you were born into) that places you to best take advantage of that system.
Pretty much everybody in their 20s and 30s start off with "free market/policy makers are idiots/customer first" viewpoint. However, with time, viewpoints usually change to more mature or balanced take on such matters. This happens because people develop interest in current affairs and start reading up on business, economy, politics etc.
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