The price-sensitive country of India loves a product that is priced lower than it usually is. Most of the times, people would not care about the quality of the product just because it is cheaper and the reason for this is not the mentality but the actual prices. The smartphone market can be seen rising because of the good phones for lesser and lesser price. This mentality is slowly and steadily spreading across the world where people are looking for a similar tech at a lower price, rather than paying much more for a product they know is good.
There is a reason for this, the comparison of products can be done with a few clicks nowadays and we have e-commerce websites to thank for that. The e-commerce revolution was so sudden that people took to it better than many analysts predicted. The 4G revolution also helped the cause of e-commerce companies. However, there seem to be some problems with the Indian regulatory authority. The reason for this is that Flipkart and Amazon, two of the leading e-commerce companies in India have somewhat created a monopoly and there is no way they are falling behind.
For this, there is a committee that is looking to investigate and the reason is to demolish the monopoly if there is any.
Monopoly or not?
Monopoly is very hard to detect. Even if it looks like companies are creating a monopoly, most of the times it is just a lack of competition. There is a difference between a lack of competition and monopoly. Monopoly is when you kill the competition like what Facebook has done but it is not the case with every company leading the way.
That being said, the competition commission of India is looking into this matter and has Ernst and Young to commit to research that will decide whether the American companies have created a monopoly in India or not. The survey report by The Wall Street Journal cited the questionnaire prepared by the competition commission of India for the sake of understanding the e-commerce industry. This is where the Indian authorities are trying to play it fair and checking of any of the Indian companies are not hampered by the giants like Walmart and Amazon.
An official from the Ministry of Corporate Affairs talked on the basis of anonymity and said, “If Amazon buys Wal-Mart controlled by Wal-Mart tomorrow or vice versa, what should we do? Will, it does not form a complete monopoly? This needs to be restricted. The department is responsible for overseeing the competition committee.”
The question the official has posted is a valid observation. There are a lot of things that could go wrong if that happens and the government and its authorities should be ready for the same.