Amazon’s Indian expansion under threat by competition watchdog
Amazon’s expansion into India has hit another obstacle as the country’s antitrust body digs deeper into a major acquisition.
In August Amazon agreed to purchase a 49 per cent stake in a unit of Future Group, which would see it acquire a 3.5 per cent share of India’s second largest retailer Future Retail which operates more than 2000 stores across the country.
India’s antitrust body the Competition Commission of India (CCI) is now understood to have requested more information from Amazon, making a delay to its purchase increasingly likely, according to Reuters.
Last month the CCI told Amazon that “in certain overlapping segments and areas of operation of the parties, the combined market share exceeds the threshold specified in the combination regulations.”
It also questioned Amazons choice of procedure used to seek approval, which could potentially delay the approval of the deal for a number of months.
This comes after Amazon was accused by the Confederation of All India Traders (CAIT) of creating an unfair marketplace using its control over inventory.
India’s retail market is expected to $1.2 trillion by 2021, nearly doubling in size from $672 billion in 2017, while its ecommerce market is due to be worth $72 billion by 2022.
Western retail giants like Amazon, Walmart and Ebay are all scrambling to secure their piece of the pie, with Walmart buying Flipkart in earlier this year for $16 billion, and Ebay investing in Paytm Mall last month.