Walmart CFO Brett Briggs said that even though the retail giant anticipated the regulatory changes in India regarding foreign eCommerce companies, it was disappointing that things happened so quickly, according to reports.
Briggs was speaking on a Raymond James Institutional Investors Broker conference call when he made the comments.
"We will have legislation changes, we know that, and you work your way through it. It is disappointing that you have a law … changed that quickly, but we have made the adjustments and are moving forward," he said. "When you make investments in India, note things are going to change.”
The new regulations are a concern for marketplaces, as they will not be able to sell products from affiliates and will not have control over product inventory or ownership. Companies like Walmart and Amazon were also required to give all sellers a fair chance at warehousing, logistics and advertising. The regulations additionally stopped eCommerce outfits from entering into exclusive agreements about product sales.
Walmart acquired Flipkart last year with the intention of expanding into the Indian market. "It is an interesting market … and also there [are] still 1.3 billion people in India. There is still a growing middle class. eCommerce penetration is getting bigger in a very rapid fashion," Briggs said.
The new eCommerce rules took effect on Feb. 1. The repercussions were immediately felt, especially by Amazon, which was forced to de-stock its virtual shelves in the country.
For example, Amazon owns 5 percent of an Indian department store chain known as Shopper’s Stop, thus its clothing is no longer available on the site. Also missing are a range of consumer electronics items, such as Echo speakers, batteries and chargers that power any number of items. Other items that are vanishing from consideration include sunglasses, household items and Amazon’s grocery offerings through Pantry.