Samsung, Xiaomi and other smartphone companies colluded with Amazon and Walmart’s Flipkart to exclusively launch products on the e-commerce firms’ Indian websites in breach of antitrust laws, according to regulatory reports seen by Reuters.
Antitrust investigations conducted by the Competition Commission of India (CCI) have found that Amazon and Flipkart violated local competition laws by giving preference to select sellers, prioritising certain listings, and steeply discounting products, hurting other companies, Reuters reported last week.
The CCI’s 1,027-page report on Amazon also said the Indian units of five companies – Samsung, Xiaomi, Motorola, Realme and OnePlus – were “involved in the practice of exclusive” phone launches in “collusion” with Amazon and its affiliates, breaking competition law.
In Flipkart’s case, a 1,696-page CCI report said the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme conducted similar practices.
The inclusion of smartphone makers like Samsung and Xiaomi in the case could increase their legal and compliance headaches.
“Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers,” CCI’s additional director general G.V. Siva Prasad wrote in the Amazon and Flipkart reports, in identical findings.
Reuters is first to report the smartphone companies have been accused of anticompetitive behaviour in the CCI’s reports which are dated August 9 and are not public.
Xiaomi declined to comment, while the other smartphone makers did not respond to requests for comment.
Amazon, Flipkart and the CCI did not respond, and have not so far commented on the reports’ findings.
Both the CCI reports said that during investigations Amazon and Flipkart “deliberately downplayed” allegations of exclusive launches, but officials found the practice was “rampant”.
Counterpoint Research data shows that South Korea’s Samsung and China’s Xiaomi are two of India’s biggest smartphone players, together holding an almost 36 per cent market share, with China’s Vivo on 19 per cent.
India’s e-retail market is set to exceed $160 billion by 2028, up from $57-60 billion in 2023, consultancy firm Bain estimates.
The investigation findings are a major setback for Amazon and Flipkart in a key growth market where they have faced the ire of small retailers for years for hurting their offline businesses.
The CCI has also said both companies used their foreign investments to provide subsidised rates for services like warehousing and marketing to a select number of sellers.
Online sales boom
Some of the smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola – have been ordered to submit their financial statements for three fiscal years to 2024, certified by their auditor, to the CCI, according to an internal CCI document dated August 28, also seen by Reuters.
The investigation into Amazon, Flipkart and their sellers was triggered in 2020 by a complaint from an affiliate of the country’s biggest retailer association, the Confederation of All India Traders, which has 80 million members.
The CCI will in coming weeks review any objections to its findings from Amazon, Flipkart, the retailer association, and the smartphone companies, and could potentially impose fines along with mandating companies to change their business practices, people familiar with the matter said.
Indian retailers have repeatedly accused Amazon and Flipkart, and smartphone companies, of exclusive phone launches online, saying shopkeepers suffered as they didn’t get the latest models and customers looked for them on the shopping websites.
“Exclusive launches had not only severely affected the ordinary sellers on the platform but also the brick-and-mortar retailers who were provided mobile phones at a much later date,” both CCI reports said, citing analyses of data from smartphone companies.
Indian research firm Datum Intelligence estimates that 50 per cent of phone sales were online last year, up from 14.5 per cent in 2013. Flipkart had a 55 per cent share in online phone sales in 2023, and Amazon 35 per cent.
Reporting by Aditya Kalra; Editing by Mark Potter of Reuters.
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Indian retailers have repeatedly accused Amazon and Flipkart, and smartphone companies, of exclusive phone launches online.
The post Samsung, Xiaomi accused of colluding with Amazon, Flipkart appeared first on Internet Retailing.
Amazon’s Impact on Global Supply Chains and Logistics
Amazon, the global e-commerce behemoth, has transformed not only the way consumers shop but also the intricacies of global supply chains and logistics. Since its inception in 1994, Amazon has grown from a small online bookstore to a trillion-dollar enterprise that has disrupted industries across the globe. Its influence extends far beyond retail, profoundly impacting supply chains, logistics, and even the environment. This article explores Amazon’s multifaceted impact on global supply chains and logistics, examining how the company has reshaped these industries and what this means for the future.
The Evolution of Amazon’s Supply Chain
Amazon’s supply chain is one of the most sophisticated in the world, characterized by its efficiency, speed, and scale. The company has invested heavily in technology and infrastructure to build a supply chain that can deliver millions of products to customers in a matter of hours or days. This rapid delivery is made possible by a vast network of fulfillment centers, sophisticated inventory management systems, and a logistics arm that rivals traditional carriers like FedEx and UPS.
One of the key innovations Amazon has introduced is its Fulfillment by Amazon (FBA) service. FBA allows third-party sellers to store their products in Amazon’s fulfillment centers, with Amazon handling the picking, packing, and shipping of these products. This service has not only made it easier for small businesses to reach a global audience but has also significantly increased the volume of goods flowing through Amazon’s supply chain. As a result, Amazon has become a central hub in the global supply chain, connecting manufacturers, suppliers, and customers across the world.
Disruption of Traditional Logistics
Amazon’s influence on logistics is equally profound. The company’s relentless focus on speed and efficiency has forced traditional logistics providers to rethink their strategies. In many cases, Amazon has bypassed traditional logistics networks entirely by building its own. Amazon Logistics, the company’s delivery arm, has grown rapidly in recent years, with a fleet of planes, trucks, and delivery vans that allow the company to control every aspect of the delivery process.
This vertical integration has enabled Amazon to offer services like same-day and two-hour delivery in many urban areas, setting a new standard for speed in the industry. Traditional logistics providers have struggled to keep up, leading to increased competition and innovation in the sector. For example, companies like FedEx and UPS have had to invest in new technology and infrastructure to remain competitive, while others have formed partnerships with Amazon to leverage its vast logistics network.
Amazon’s logistics network has also expanded globally, with the company establishing regional hubs and fulfillment centers in key markets around the world. This global expansion has allowed Amazon to offer faster and more reliable delivery services in regions where traditional logistics infrastructure is underdeveloped. In many cases, Amazon has played a role in building out this infrastructure, partnering with local logistics providers or investing in its own facilities.
Impact on Global Supply Chains
Amazon’s impact on global supply chains extends beyond logistics. The company’s demand for speed and efficiency has rippled through the entire supply chain, from manufacturers to suppliers to retailers. This has led to significant changes in how companies operate, with many adopting new technologies and strategies to keep up with Amazon’s pace.
One of the most significant changes is the increased reliance on automation and technology in supply chain management. Amazon has been at the forefront of this trend, investing heavily in robotics, artificial intelligence, and data analytics to optimize its supply chain operations. For example, the company’s use of robotics in its fulfillment centers has reduced the time it takes to pick and pack orders, while its AI-driven demand forecasting tools help ensure that the right products are always in stock.
This emphasis on technology has influenced other companies to follow suit, leading to a wave of digital transformation across the industry. Manufacturers and suppliers are increasingly using data analytics and AI to optimize their operations, while retailers are adopting new technologies like blockchain to improve transparency and traceability in their supply chains.
Another significant impact of Amazon on global supply chains is the shift towards a more customer-centric model. Amazon’s focus on the customer has forced companies to rethink their supply chain strategies, with many now prioritizing speed, convenience, and flexibility over cost. This has led to the adoption of new fulfillment models, such as just-in-time inventory and dropshipping, which allow companies to respond more quickly to changes in customer demand.
The globalization of Amazon’s supply chain has also had broader implications for international trade. By connecting sellers and buyers from different parts of the world, Amazon has made it easier for companies to access global markets. However, this has also led to increased competition, with companies now competing on a global scale. This has put pressure on manufacturers and suppliers to lower costs and improve efficiency, leading to changes in how goods are produced and distributed around the world.
Environmental and Social Implications
While Amazon’s impact on supply chains and logistics has been largely positive in terms of efficiency and convenience, it has also raised concerns about the environmental and social implications of its operations. The company’s emphasis on fast delivery and the constant movement of goods around the world has contributed to increased carbon emissions and environmental degradation. In response to these concerns, Amazon has committed to achieving net-zero carbon emissions by 2040 and has invested in initiatives like electric delivery vehicles and renewable energy projects.
However, critics argue that these efforts are not enough, and that Amazon’s business model is fundamentally unsustainable. The constant pressure to deliver goods faster and cheaper has led to concerns about the working conditions in Amazon’s fulfillment centers and the treatment of delivery drivers. Reports of long hours, high injury rates, and low wages have sparked protests and calls for better labor practices across the company’s global operations.
The Future of Supply Chains and Logistics
As Amazon continues to grow and evolve, its impact on global supply chains and logistics is likely to deepen. The company’s investments in technology and infrastructure will continue to set new standards for speed and efficiency, forcing other companies to innovate and adapt. At the same time, the environmental and social challenges associated with Amazon’s operations will require the company to rethink its approach to sustainability and labor practices.
In the future, we can expect to see more companies adopting Amazon-like supply chain strategies, with an emphasis on speed, technology, and customer-centricity. However, these changes will also require a greater focus on sustainability and ethical practices, as consumers and regulators increasingly demand more responsible business operations.
Conclusion
Amazon’s impact on global supply chains and logistics is undeniable. The company has reshaped the industry in its image, setting new standards for speed, efficiency, and customer service. While these changes have brought many benefits, they have also raised important questions about sustainability and labor practices. As the world’s largest online retailer, Amazon will continue to play a central role in the future of global supply chains and logistics, driving innovation and change across the industry.