HELP! Why FlipKart, Ola using Code “Nationalism” for their SOS to Government

By | Dec 14, 2016 | 79 views Facebook Twitter Gmail Google+ Pinterest

Recently, Flipkart’s Sachin Bansal and Bhavish Aggarwal of Ola; have urged the government to play the saviour by intervening in their fight against foreign-origin rivals Amazon and Uber. Tuning in to nationalism they have requested the government to design policies favouring homegrown companies.

Apparently, these companies did not seem to have any problem with FOREIGN investors when they were treading the smaller INDIAN retailers with loads of FOREIGN money?

Nationalism or Need of the Hour?

It was a double whammy for FlipKart when Morgan and Stanley made a steep markdown to $5.6 billion and Vanguard Fund devalued its shares by 33 percent within three days. Year 2016, has not been particularly bright for Flipkart. With four markdown valuations in a row media is abuzz with speculations that it would be difficult for the unicorn to get funding from the kind of investors it needs. Ola is also facing stiff competition from Uber and at its current valuation finding it difficult to raise fresh capital.

Asking for government intervention at this juncture on grounds of preserving national interests and providing level playing field sounds more like a distress call rather than an India-centric approach. Government backing and favourable policies can give them a strong reason to go back to investors while they try to stabilize themselves on shaky ground.

Are these companies truly Indian?

Foreign investors data clearly shows there is nothing Indian about these companies. FlipKart and Ola both have over 80% overseas investor ownership. Their total foreign investment is higher than that of Amazon and Uber.

Instead of hankering for government protectionism in the guise of nationalism they should gear up for global standards and come up with a better plan and services to revive their business.Begging the government to hold their hands and provide them special benefits is like crying foul when the other player is clearly winning the game with better moves and business strategy.

Should Government heed to their call and offer protectionism?

Claiming privilege on the basis of the fact that the founders are Indian is a completely flawed argument. With high amount of foreign funding and ownership these companies cannot claim to be completely Indian.

If the government intervenes it cannot be specific about giving privileges solely to these two players. Instead, a more more comprehensive plan to aid all indian entrepreneurs and smaller retailers should be formulated and implemented. Government policies should be aimed towards protecting the interest of the smaller retailers and entrepreneurs from the predatory nature of bigger players whether Indian or from other countries.

Also, the government should enforce policies in the interest of the consumers so that they experience world class services and products from Indian as well as foreign players in the ecommerce space.

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