What Apple’s India Victory Says About Amazon’s Paris Troubles

Amazon Runs Into Trouble In Paris

Apple and Amazon are so ubiquitous in just about every country in the Western world that it’s difficult to imagine an entire country resistant to the idea of one or both of these retailers setting up shop within their borders. After all, what shopper doesn’t like same-day delivery and biannually upgradeable consumer electronics? What government wouldn’t want the infusion of investments and innovation centers that often grease the rails running under cross-border deals?

Until recently, that government was India, telling Apple to hold its horses. And even though it looks like India is open to relaxing some of its restrictions on foreign businesses, the reasons why could spell an equally complicated quagmire for Amazon in Paris.

The story picks up halfway through the strung-out saga of Apple trying to schmooze its way through Indian regulations to open store fronts in the country and claim a piece of the slowing-growth offset pie. After being flatly denied a waiver on a local sourcing requirement for foreign-owned retailers last month, Apple seemed to be out of luck in India. However, reports had that “no” shifting slightly toward a soft “maybe.”

Then, the sun rose on Monday (June 20) and with it came an announcement from the office of the prime minister explaining that not only would several industries unrelated to Apple receive a three-year waiver from the foreign sourcing requirement (aviation, pharmaceuticals and animal husbandry among them) but Apple itself would be given a five-year cushion thanks to its nature as a producer of “state-of-art” and “cutting-edge” technology. The Indian government itself referred to these changes as “radical,” and without details on negotiations that may or may not have taken place out of the public eye, the lack of forewarning makes them appear exactly so.

But while the changes might be radical, it can’t be said they come entirely unexpected. There’s speculation that the recent resignation of a key finance minister may have had a role to play in the about-face, but to wholeheartedly embrace reform to several retail categories points to some other impetus. Namely, as PM Narendra Modi tweeted shortly after the announcement, the reforms would make India “the most open economy in the world for foreign direct investment” and create “major impetus to employment and job creation.”

In the end, despite plenty of saber-rattling and bureaucratic delaying, the decision came down to an economic one, and the Indian government erred on the side of what’s worked to improve economies before: partnerships with massive retailers all but guaranteed to do well once they set up shop.

It’s a happy ending for Apple and India (at least for the next five years), and casual observers might predict a similar conclusion to the spat brewing between Parisian officials and Amazon’s on-demand grocery delivery, which just announced it would be offering same-day service around the clock rather than the traditional truncated hours. Established France is obviously in a different economic position than emergent India, and given that, plenty of Parisians — including the mayor and several of her deputies — haven’t been shy about decrying the effect express grocery deliverers could have on hundreds of independent corner grocers — the cultural founts from which the City of Light’s ambience is ostensibly renewed.

“This operation risks seriously upsetting the commercial balance in Paris,” Mayor Anne Hidalgo said, via The Guardian“This large American company did not see fit to inform Paris until a few days before the launch.”

Modern France has garnered plenty of notoriety (or infamy, depending on the perspective) for its dogged commitment to protecting French culture at all costs, and that’s what differentiates Apple’s success in India from Amazon’s developing battle in Paris. The former was an objectively economic issue. Apple wanted, and still does want, to get in on India’s booming consumer markets to offset slowing growth elsewhere, and the Indian government had to reform economic regulations to do so.

In Paris, however, it’s not Amazon or foreign retailers in general that officials are finding fault with but rather Amazon’s way of doing business that is being set up as damaging to the city’s ephemeral culture. Moreover, this is far from the first time Paris officials have hid behind the shield of cultural protectionism, and Hidalgo and her office have already started ruminating on regulations they can slap onto Amazon’s fulfillment center to the north of the city after re-categorizing it as a supermarket.

So, while Apple’s breakthrough in India may look like cause for hope among Amazon executives in France, the eCommerce giant is about to fight a battle of a much different sort — one that can’t easily be won with the traditional toolkit of cross-border commerce perks.