[ashwin.terminat]

Originally Posted by am1m

Boy I'm really glad there are still people who think this way. Every millennial I come across is aggressively for unbridled-capitalism.

I agree. Even when I wantd to buy a Lumia in 2013, I asked almost every shop around if they could match the prices given by Flipkart at the time, every single shop said no. Of course, I bought it on Flipkart after that.

These regulations will definitely help bolster smaller online and offline retailers who cannot afford to sell in loss in order to gain market share.

[Sherlocked]

Optimistic about Indian market despite changes in e-commerce FDI policy: Walmart

Walmart’s and Flipkart’s commitment to India is deep and long term. Despite the recent changes in regulations, we remain optimistic about the country, said Dirk Van den Berghe, Executive vice-president and regional CEO Walmart Asia and Canada.

The Bentonville-based retailing major’s statement came after a recent report by global consultancy firm Morgan Stanley, which had hinted that Walmart may quit Flipkart as the new foreign direct investment (FDI) policy came into effect, which would lower its profitability in the long run.

LINK

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It may seem that Amazon was trying to create monopoly which may harm local traders in the long run. I'm all in for protecting the interests of the local traders. However, the reason I preferred Cloudtail while shopping was not just limited to price advantage, but also to timely and professional delivery, genuine products, and most importantly, a customer friendly after sales services.

Even if the price of products increases, I just hope that other ingredients which distinguished shopping through Cloudtail from other vendors remains.

[mi2n]

The economics and politics aside, life has just got a bit more saner post the regulations. I can speak only for myself here, but the online retail giants, through their variety of products, aggressive advertisements, catchy deals and prices has, over the years, induced and often fooled me into buying things most of which were not really needed.

I'll admit I have got some useful items of them as well, like a branded pressure washer for Rs.3,000! The Amazon pantry and Prime subscriptions are worth the salt as well. But overall, I have wasted a lot of money on these "online marketplaces". A week down into the new norms now, and I have almost stopped opening the apps altogether and saved at least Rs.1,000 already. Used to surf through the sites at least a dozen times a day even a month back. Yes, I know there are/would be collateral damages and yes the offline traditional businesses will pounce on the opportunity to recover past losses resulting in higher prices for most commodities. But I feel, as a consumer, things will even out perfectly. Impulsive purchases have been more damaging to my finances.

I think, I'll be okay with buying a 20k phone for 1.5k extra at a retail shop once every two years.

[RSimonS]

Originally Posted by Samurai

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:

It could also be a pure coincidence that one of the big business houses announced entry into online space in few days of the policy change.

Irrespective of Foreign or Indian, if a player with deep pockets is entering the market, there would be disruption and the smaller players would get wiped out. Unfortunate after effect would also be the drop in quality of service. We are seeing the same with Mobile Network, we will witness the same in Internet connections and soon with online stores as well. At times I feel governments are particular that the expenses of middle class should not reduce.

[locusjag]

Originally Posted by SmartCat

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.

Straying somewhat OT, but adding on to the profound wisdom shared by SmartCat here.

Ever noticed how when young, most people have liberal values? Let them turn a bit older and see how they return to their roots. Your mileage may vary, but this holds true for the most part.

I've often wondered why the Indian diaspora has supported liberal politicians in the US when, in due time, once the same people have bagged their Green Cards and US Citizenships, they went on to vote for Trump. I could give you umpteen real life examples of this phenomenon.

[Chetan_Rao]

Originally Posted by locusjag

Straying somewhat OT...
...once the same people have bagged their <insert benefit here> they went on to <support withholding same benefits from others like them>

Wildly off-topic, but it's got little or nothing to do with liberal vs. conservative values, and a lot (or all) to do with 'got mine, screw you' values. Correlation isn't causation, like I believe you said in another thread recently.

[civic-sense]

Originally Posted by mi2n

I think, I'll be okay with buying a 20k phone for 1.5k extra at a retail shop once every two years.

You could have still bought from local retailers at a higher price.

In a free market you are free to buy from your high priced local retailer and me from my preferred low priced etailers. What you are advocating is taking away my freedom, but keeping yours.

Originally Posted by Chetan_Rao

Wildly off-topic, but it's got little or nothing to do with liberal vs. conservative values, and a lot (or all) to do with 'got mine, screw you' values. Correlation isn't causation, like I believe you said in another thread recently.

Millenials are just well meaning fools who think they can legislate away to prosperity. It takes time and experience to realize what is right.

[Chetan_Rao]

Originally Posted by civic-sense

...
In a free market you are free to buy from your high priced local retailer and me from my preferred low priced etailers. What you are advocating is taking away my freedom, but keeping yours....

Your argument holds until the point of market capture, at which point your choice of both vendor and ergo price becomes non-existent.

Not an apples to apples comparison, but look at the cab market. Uber and Ola priced everyone else out with insane discounts for a while, then jacked up prices once they were the two biggest players in the market, which could further become one if Uber repeats what they did elsewhere and sell out.

Pricing is bit like energy; can neither be created nor destroyed, only be moved from one pocket to another until you run out of pockets.

[am1m]

Originally Posted by civic-sense

Millenials are just well meaning fools who think they can legislate away to prosperity.

Woah! I didn't mean to trigger millennial-bashing or name calling here! Was just an observation that I made.

[AMG Power]

Originally Posted by RSimonS

It could also be a pure coincidence that one of the big business houses announced entry into online space in few days of the policy change.

Well, it certainly makes things easier for these folks now:


Reliance to take on Amazon / Flipkart in India


Inside Mukesh Ambani's Reliance E commerce plan


RIL unveils plan to take on Amazon / Flipkart at AGM

[civic-sense]

Originally Posted by Chetan_Rao

Your argument holds until the point of market capture, at which point your choice of both vendor and ergo price becomes non-existent.

Not an apples to apples comparison, but look at the cab market. Uber and Ola priced everyone else out with insane discounts for a while, then jacked up prices once they were the two biggest players in the market, which could further become one if Uber repeats what they did elsewhere and sell out.

Should I be jealous at Ola/Uber for making a lot of money or should I just be thankful to them now that the autowallas and taxiwallas are not fleecing me? Yes, their rates are not what used to be when they launched, but they are still not even close to what the autowallas used to charge when they were fleecing us. And if you say that they will turn rogue one day, well there will be somebody waiting to disrupt the market that day. If not by presenting a new business model, by playing the price game. If they start charging 10 times the fare if Uber becomes a monopoly, some Lala would see an opportunity and launch his Fuber app. If Uber is charging 100 rupees for a km, and Lala's Fuber is charging 10 rupees per km, should I even mention which Taxi you would be taking?

Originally Posted by AMG Power

Plan - Stage 1 - Kick off?


Reliance to take on Amazon / Flipkart in India


Inside Mukesh Ambani's Reliance E commerce plan


RIL unveils plan to take on Amazon / Flipkart at AGM

So battle lines are drawn. Pick your sides - Crony capitalism vs Free market.

[ksameer1234]

Originally Posted by civic-sense

If they start charging 10 times the fare if Uber becomes a monopoly, some Lala would see an opportunity and launch his Fuber app. If Uber is charging 100 rupees for a km, and Lala's Fuber is charging 10 rupees per km, should I even mention which Taxi you would be taking?

Except that there is a small problem here. Amazon and Flipkart have found loopholes in FDI norms by setting up Cloudtail and WS retail respectively thus selling goods at deep discounts. These deep discounts helped them divert sales away from brick and mortar stores. Now, due to deep pockets lined with foreign investment, Amazon and Flipkart were able to bleed offline stores and other online marketplaces to death.

In your example, while someone can start from scratch with disruptive prices, individual taxi drivers will be driven out of market because they need to earn on daily basis to be able to get to work next day.

I think what has happened now is that government has plugged the loopholes which Amazon and Flipkart made use of till now. I don't think government's stand of FDI was unclear at any time. FDI is good only so long as it does not create a massively skewed field just by the virtue of money-power.

[Chetan_Rao]

Originally Posted by civic-sense

....If Uber is charging 100 rupees for a km, and Lala's Fuber is charging 10 rupees per km, should I even mention which Taxi you would be taking?...

Cheapest isn't always the best or the most desirable in the longer run, and there's a reason why I still rely on good old Meru when I want to be absolutely sure I'll get a cab (airport drop, for example). Never been in trouble yet, and I've been a user since one needed to call for reservations, and through the times when Uber/Ola were doing flat-rate airport drops for ~50% of what the metered cabs were charging.

Today, there's barely any difference in Uber and Meru charges for an airport ride (Meru's often cheaper by a bit), plus they're far more reliable availability wise. Even when leaving Bangalore airport, the Meru/Mega/KSTDC queues are often shorter and/or move quicker than the Uber/Ola ones and cab quality is arguably better too.

That isn't to say I'm against cheaper stuff or an efficient player disrupting a bloated market or service, but it's a bit more complex than 'cheap is best'. Unsustainable cheap is useless, or worse, in the longer term, same as unsustainable expensive. The latter gave us the choice of Uber/Ola over the auto-wallahs like you say (and rightly so), but let them monopolize the market and we'll be left with no choices when we want to move away from them.

Monopolies start with incentives, but can't sustain on them alone. Once they enter consolidation phase, they'll implement all sorts of tricks (regulatory capture being one such) to ensure no Lala can start and operationalize a Fuber (as in your hypothetical example). It takes time to get there, but reversing the phenomenon is usually an uphill climb on a slippery slope.

Originally Posted by am1m

....the kind of people providing the service are more or less the same.

Not more or less, exactly the same. Plenty of auto-wallahs and individual cab drivers moved up to Uber/Ola using their loan schemes in hopes of making hay with the incentive programs, and plenty of youth that earlier moved to Bangalore to drive an auto/cab to make a living are now driving for Uber/Ola instead. All are slowly figuring out the tall 'earn X per month' claims are just hot air. Plenty have had their vehicles repossessed, some voluntarily because the cost-benefit equation no longer made sense.

[am1m]

Originally Posted by Chetan_Rao

The latter gave us the choice of Uber/Ola over the auto-wallahs like you say (and rightly so), but let them monopolize the market and we'll be left with no choices when we want to move away from them.

I think a lot of the Uber/Ola drivers behave exactly like the auto guys in Bangalore. They accept rides and THEN realize they don't want to go, so either cancel them or try and get you to cancel. They disappear during odd hours, whenever it rains, or when they have to go to 'heavy traffic' destinations. They think they own the road and drive badly, except for a very, very few. And going by the regular news reports of some cabbie behaving badly with passengers, I'd say they are as big thugs as the auto guys. The only difference is there is an app and you can rate the driver. What effect that has is still unclear. Otherwise the kind of people providing the service are more or less the same.

[Hayek]

There are two parts to this issue. The first is whether online retail will destroy offline retail (or at least shrink it enormously). That is certain to happen - because selling goods online is a fundamentally more efficient way of getting goods from suppliers to customers. That is true in countries like America with cheap real estate and costly labor - but even more true in India with insanely expensive real estate and cheap labor. The small shop keeper and the mall developer are both in business models that will inevitably go extinct. Personally I am happy about that - there is nothing I hate more than having to visit a shopping mall.

The second question is which vendors will provide that online retail service. Flipkart and Amazon (both of which were always foreign owned, even before Walmart bought the investors in Flipkart out) built this business out, but clearly the large Indian industrial groups would like to play here. They missed the bus in creating this space - but have have other skills up their sleeve. Clearly, this policy (which hurts only foreign owned entities) is a classic example of that.

Of course, Walmart and Amazon are not babes in the woods - and will deploy their local lobbying skills and the might of the US government to fight their case. Let’s see how this plays out.