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30 Mar 2017

Indian online players want government to ensure fair play

An unequal race for Indian market dominance

Indian online players argue that foreign rivals enjoy more fringe benefits than home grown ones.

From capital dumping to hiccups at paying taxes, foreign rivals have a more smooth sailing while they share the same market.

They believe it is time for the government to form new laws that tip the favour towards local companies.

Here is a detailed look at the argument.

In context

An unequal race for Indian market dominance
Major areas of contention put forward

Unequal rivalry

Major areas of contention put forward

Vijay Sharma, who runs Paytm, in Global Business Summit pointed out that there was a major disadvantage in listing as Indian firms are not allowed to raise public money through overseas IPOs.

Deep Kalra, in the same summit, said that major online franchises which operate in India do not have to pay service taxes or go through two-factor authentication as local e-businesses have to.

The argument

The dynamics of staying ahead of the curve

There are two defined set of companies that are battling it out in the e-commerce and cab-aggregation business.

First there are players like Flipkart and Ola, which carry the "Make in India" brand.

Others are biggies like Amazon and Uber, to whom India is an extended franchise of the empire. When these two different sets are pitted against each other, its an unequal fight.

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Bleeding out profits, to keep sharks at bay

Money speaks

Bleeding out profits, to keep sharks at bay

In a competitive market, market dominance would lead to a massive spending on discounts on both side for customer acquisition.

But, the problem starts when a franchise brand is able to cushion their fall by balancing it with earnings from other countries, the indigenous players do not have the same luxury but to stay ahead they have to incur the same or greater loss.

Major revamp needed

"Make in India" stop gap is not for gushing wounds

Make in India, as a concept gets a huge discredit when there is a pure market mechanism at place and not favourable action by the government for the home-grown brands.

Therefore, an online space becomes a place for the behemoths to flex their muscles and squash the home-grown brands with injection of more capital than improvement in standards of service and better customer satisfaction.

If Asia's biggest market could do it, second should follow


If Asia's biggest market could do it, second should follow

China's Didi Chuxing was able to oust Uber, thanks to the stringent rules that the government had put in motion several years ago in favour of local companies.

Amazon has failed to make any dent in the market that is dominated by Alibaba but is lenient enough to let a new entry JD.com, a home-grown competitor make profits.

A lesson to learn here?

The coveted $1 billion "unicorn" valuation

When a start-up is valued at over $1 billion, it is called a unicorn. According to recent studies the three industries with the most unicorns where Internet, software and e-commerce. As for the count, USA have 144 unicorns. China has 47 and India has 9.

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