India has a new rule which makes it harder for foreign ecommerce operators (usually American companies) to do business in the country. The rule is so challenging that Amazon has pulled down 400,000 products from its Indian store. Flipkart, controlled by Walmart, will take down 25% of its inventory to comply with the rule.
One hopes that Donald Trump does not read the news and impose restrictions on Indian software services in U.S. But let me not waste your time on what India wants to do with Amazon and Walmart. Let us focus why these companies do not want to enter Nigeria with the same zeal and energy.
Sure, we know why but yet India has the same challenges as Nigeria (minus TRUST) and the American firms are investing to fix those issues. I call on Amazon and Walmart to open stores in Nigeria: we will not even bother if they want to ship from Arkansas or New York. As India gives them troubles, Nigeria will welcome them. Of course, they have to come with their own “post offices” if they want to make ecommerce a business!
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Amazon has been forced to pull an estimated 400,000 products in India after new regulation limiting e-commerce businesses went into force in the country today.
First announced at the end of 2018, the new regulation imposes a ban on exclusive sales, prevents retailers from selling products on platforms they count as investors, and it applies restrictions on discounts and cashback promotions.
That’s hugely problematic for Amazon and Flipkart, its rival that’s owned by Walmart following a $16 billion investment last year. After a 2016 ruling prevented it from owning inventory, Amazon restricted its system so that its own products were offered by entities that it jointly owned with local partners. However, the newest regulation forbids it from working with organizations that it has ownership of, hence it is estimated to have pulled as many as 400,000 products from sale in India, according to a New York Times report.
The same report suggests that Flipkart could pull as many as one-quarter of its products in order to comply with the rule, according to analysis from consulting firm Technopak.
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This has Mukesh Ambani/ jio written all over it.