Alluding to the new Foreign Direct Investment (FDI) policies imposed by the government in February on the e-commerce business Walmart‘s chief financial officer Brett Biggs said it was expecting some changes but was disappointed it happened so quickly.
“We will have legislation changes, we know that and you work your way through it. It is disappointing that you have a law like that changed that quickly, but we have made the adjustments and we are moving forward,” said Briggs at Raymond James Institutional Investors Broker conference call.
The statement comes a month after, when in February Indian government issued new guidelines for the e-commerce companies. The New FDI rules barred e-commerce platform from making any kind of ”exclusive deals” with the seller. It also barred them from selling the product through the same platform in which it has invested. Also, E-commerce giants including Walmart-owned Flipkart and Amazon were also asked to render various services such as logistics, warehousing and advertising to all sellers in a fair manner.
In order to comply with the new FDI policies Flipkart has to remove about a quarter of its products from its website, which mostly include Smart phones and electronics.This disrupted its business very badly and plunges its sales
Walmart acquired Flipkart in a $16 billion deal with an eye on the growing e-commerce market in India lobbied heavily against the new FDI policies but was unsuccessful and had to bear consequences.
“It is an interesting market and the reasons we decided to make the Flipkart investment and also there is still 1.3 billion people in India. There is still a growing middle-class. E-commerce penetration is getting bigger in a very rapid fashion,” added Briggs.
Walmart was ”Disappointed” over the new rules but in the long run the worlds largest retailer will remain bullish on its Indian e-commerce business.“Don’t feel any differently than about it just six months ago,” Briggs added.
Earlier in February Walmart’s CEO commented on the new FDI rules, “In terms of the regulatory environment in India, we are disappointed with the recent change in law but the team is working to ensure we are in compliance with the new rules. We hope for a collaborative regulatory process in the future. This will result in a level playing field.”