Late on Wednesday, the Indian government introduced new rules for India's e-commerce industry that could have grave new implications for how foreign online retailers decide to do business in the country. Specifically, the government banned online retailers Flipkart and Amazon from sourcing more than 25 percent of their inventory from a single vendor -- many of them in which these retailing giants hold stakes. The ruling also prevented these two e-commerce biggies from entering into exclusive deals. "Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25 percent of purchases of such vendor are from the marketplace entity or its group companies," said the ruling also known as the updated Press Note 3. Amazon's operations in India are likely to suffer the most immediate hit considering that most of the major sellers on its site are companies into which it has invested, including Cloudtail and Appario -- Cloudtail is a joint venture between Amazon and Infosys icon N.R. Narayana Murthy's Catamaran Ventures. Flipkart may not appear to have suffered as grievous a hit since its exclusive seller, WS Retail, apparently stopped functioning in August.
Should India follow China's example and protect its startup scene by placing limitations on foreign companies? Or should it accept that global capital is an integral part of Indian entrepreneurial success and allow for firms funded by it to have unfettered play? So far, India has allowed firms such as Amazon, Facebook, and Google to dominate its e-commerce, social, and search sectors, whereas its neighbouring countries have effectively cut them off at the knees. These questions have gained widespread attention as India wades into an uncertain technology landscape. They will be a hot talking point, especially after the conclusion of the Hindu festival of Diwali that took place in the early part of November.
India's largest home-grown e-commerce giant, Flipkart, is making a big push for artificial intelligence (AI). A new unit, AI For India, will use AI technologies to mine the consumer data that Flipkart has gathered over the last decade to strengthen its business offerings, a company blog post said on Dec. 21.
Amazon has made a formal offer to buy a majority stake in Indian e-commerce firm Flipkart, CNBC affiliate CNBC TV-18 reported Wednesday, citing sources. The U.S. e-commerce giant has offered to purchase a 60% stake in Flipkart. As part of the proposal, Amazon is seeking a non-compete agreement from Flipkart's founders, TV-18 said. Amazon's bid is a counter to Walmart, which is reportedly in advanced talks to become the largest shareholder of Flipkart. Several reports earlier this year said the Bentonville, Arkansas-based company could invest between $10 billion and $12 billion for the entire purchase, but the primary investment would be between $1 billion and $2 billion.