Amazon’s Alien Invasion into the USD $1T Indian retail sales market (via a hookup with local Future Retail, Ltd) is being countered with legal tactics and a counter-buyout from Reliance Industries. This is a complex and ongoing battle.
EkaLore’s previous release briefly described using legal regulatory/court tactics to slow down/counter an Alien Invasion. Amazon’s Alien Invasion is being defended by a different set of legal tactics. Amazon has filed a very complex pleading to prevent the Indian legal process from ruling against their foreign ruling in a Singapore court.
An Alien Invasion targets traditional business models and existing “everybody knows” ideas in pursuit of new revenues, margin, and hunks of a market. In Amazon’s invasion (and those of Walmart and others) the application of foreign-direct investment capital (capital is one of the elements EkaLore uses to distinguish an Alien Invasion) is being resisted by enterprises, nationalist, and traditional retail industry structures. Amazon is looking to retain the value of its investment in Future Retail (and positions in Shoppers Stop and More Retail). Traditional business participants fear that the efficiencies brought about from online shopping and changed distribution will disrupt relationships and employment.
’Non-tariff barriers‘ have long been used against foreign company invasions. This tactic allows Domestic suppliers to repel/hobble alien attacks without using a tax/fee levied at a border. The slow-down of the opening of Tesla’s German plan, vaccine adoption in various global markets during 2021, and resistance to US car imports from Japan in past decades are all good examples.
Amazon is a global mega enterprise with ambition, capital, and abilities to absorb non-tariff barriers and other counters from Indian enterprises, regulators, and politicians. Amazon has frozen and complicated Future’s actions with banks even as the courtroom, regulator, and arbitration proceedings play out. Even if Amazon is held at a standstill the pressure on Future also increases.
Driven by fears (often reasonable) of traditional business participants, non-tariff barriers may hurt other stakeholders (like consumers) while protecting traditional interests. Even when employed, non-tariff barriers have had mixed results (see US efforts against Huawei). Implications from actions directed against Amazon may have directly affected Walmart (FlipKart) and Meta/Facebook (Jio) foreign investments in the Indian marketplace. Stakeholders benefiting from investments and buyouts from foreign enterprises are likely to pressure regulators and politicians not to block their payouts.
Effective enterprise response to an Alien Invasion requires addressing multiple vulnerabilities to resist Alien Invaders. No simple single tactic is enough to address an invasion. Enterprises must execute multiple responses to create better customer experiences, refresh their technologies, and better manage customer relationships. An outcry from customers and suppliers benefiting from new competition and market efficiency means that any responses to an Alien Invasion can also be met with counter-counter-measures. Due to the scale and ambitions of Alien Invaders and market incumbents,nationalistsby few single responses or near-term wins will decide the success or failure of the Alien Invasion.
This is easy to say but moving from sentiments to action plans is not so easy. EkaLore’s team helps companies not only fill out strategic shifts but helps them translate them into actions. If you suspect you’re suffering from an Alien Invasion, but you are not sure, consider setting up a free consultation with us.
If you are already under threat, contact us at www.ekalore.com/contact, and we’ll set up a time for you to speak with a senior analyst.
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