Blame: Amazon along with Samsung, Xiaomi and others have monopolized 90% of the world's second smartphone market

Samsung, Xiaomi, and other manufacturers have colluded with Amazon and Flipkart (owned by Walmart) in India. Smaller retailers do not have access to the latest smartphones.

Samsung and Xiaomi are two of the largest players in the Indian smartphone market Together, they hold nearly 36% of the market, with Vivo accounting for an additional 19%. According to consulting firm Bain, the electronics retail market in India is expected to exceed $160 billion by 2028, compared to $57-60 billion in 2023.

Indian retailers have repeatedly accused Amazon and Flipkart, along with smartphone manufacturers, of launching exclusive products online. As a result, store owners were unable to obtain the latest models, and customers could only find them on the websites of the colluding retailers In 2023, Flipkart held a 55% share of online phone sales in India, while Amazon captured 35%.

An antitrust investigation by India's Competition Commission (CCI) found that Amazon and Flipkart violated local competition laws. The colluding parties favored select sellers, significantly undercut prices, causing harm to other businesses.
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The CCI's report on Amazon also noted that the Indian branches 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, breaching competition legislation. Regarding Flipkart, the CCI report indicated that the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo, and Realme engaged in similar practices. The companies have yet to respond to these findings.

“Exclusivity in business is a curse. It is not only against free and fair competition but also against consumer interests,” wrote the additional CEO of the CCI, G.V. Siva Prasad, in both reports.

The reports also state that during the investigation, Amazon and Flipkart intentionally downplayed allegations of exclusive launches. However, officials discovered that this practice was widespread. The CCI also reported that both companies utilized their foreign investments to provide discounts on services such as warehousing and marketing for certain sellers.

The findings of the investigation represent a significant setback for Amazon and Flipkart in a key market where they have faced resistance from smaller retailers for years due to obstacles in their offline business. The CCI will consider any objections to its findings from Amazon, Flipkart, and other stakeholders in the coming weeks. Following this, the commission may impose fines and require the companies to change their business practices.

Source: Reuters