THE HINDU Editorial Vocabulary - May 11, 2018 - Topic 1

Online retail flip: on the Walmart-Flipkart deal

India’s e-commerce market, which accounts for less than a tenth of its overall retail opportunity, has just got a significant thumbs-up from American supermarket giant Walmart. It has announced a plan to buy a controlling stake of around 77% in home-grown e-commerce firm Flipkart for a sum of $16 billion. In the process, Walmart has pipped rival Amazon, which is just behind Flipkart when it comes to its share of the Indian e-commerce pie and has independently been vying to acquire the Bengaluru-based company. 

China’s Alibaba, with its investment in Paytm Mall, is vying to compete in the space as well, along with the likes of Snapdeal, which around this time last year was being linked to a much-speculated merger plan with Flipkart. But the big battle for Indians’ e-tail space, for now, will play out between two of America’s biggest companies. Not surprisingly, traditional retail players have responded with willingness to adapt to this paradigm shift and consider strategic alliances with online rivals. Interestingly, Walmart investors have voted against what they saw as an expensive bet, with the firm losing about $8 billion in value on the bourses after the deal was finalised. Though e-tail may have changed shopping habits among swathes of Indians, it remains heavily dependent on discount-peddling. Flipkart, in particular, has reported accumulated losses of ₹24,000 crore.

Walmart is betting on the future growth it can unlock from this full-frontal entry into a market that has proved difficult despite its best attempts for over a decade. The company had entered India in 2007 but exited the joint venture with the Bharti group and restricted its operations to cash-and-carry stores, in the face of strict curbs on foreign direct investment (FDI) in the multi-brand retail sector. These restrictions, ostensibly to protect smaller retailers, have remained in place under the NDA government, belying expectations of a reset. Facing heat at home from Amazon, which is now moving from online-only to a brick-and-mortar plus e-tail model, this is a vital time for Walmart to get into India’s business-to-consumer segment. That this deal doesn’t ruffle extant policy restrictions, in fact, reveals the inefficacy of India’s approach to retail FDI in a rapidly changing global marketplace. Local trade lobbies as well as swadeshi advocates are determined to resist the deal, while analysts are wondering how Walmart will turn around Flipkart’s cash burn rates. However, for India’s policymakers, neither of these should matter. It is important to assess if, and how, the U.S. firm will integrate Indian suppliers into its international operations. Most importantly, it is time to nuance the debates that have dominated India’s retail FDI policy — big versus small, local versus foreign — to create a truly level playing field where all can compete, without artificial safeguards that can be overcome via such deals.

Vocabulary

Acquire: buy or obtain an object or asset for oneself.

Example: Instead, tax will become payable automatically 30 days after the date that the purchaser acquires the property or land.

Synonyms: obtain, come by, get, receive, gain, earn, win, come into, be given

Speculate: form a theory or conjecture about a subject without firm evidence.

Example: My colleagues speculate about my private life

Synonyms: conjecture, theorize, hypothesize, guess, surmise

Willingness: the quality or state of being prepared to do something; readiness.

Example: The ability and willingness of workers to migrate

Synonyms: readiness, inclination, will, wish, desire, alacrity

Vye: compete eagerly with someone in order to do or achieve something.

Example: Rival mobs vying for control of the liquor business

Synonyms: compete, contend, contest, struggle, fight, battle, cross swords

Expensive: costing a lot of money.

Example: Keeping a horse is expensive

Synonyms: costly, high-priced, dear, overpriced, exorbitant, extortionate

Accumulate: gather together or acquire an increasing number or quantity of.

Example: Investigators have yet to accumulate enough evidence

Synonyms: gather, collect, assemble, amass, stockpile, pile up, heap up

Despite: without being affected by

Example: He remains a great leader despite age and infirmity

Synonyms: in spite of, notwithstanding, regardless of, in the face of

Ostensibly: apparently or purportedly, but perhaps not actually.

Example: Portrayed as a blue-collar type, ostensibly a carpenter

Synonyms: apparently, seemingly, on the face of it, to all intents and purposes

Ruffle: disorder or disarrange someone's hair, typically by running one's hands through it.

Example: He ruffled her hair affectionately

Synonyms: disarrange, tousle, dishevel, rumple, disorder, mess up, tangle 

Resist: withstand the action or effect of.

Example: Antibodies help us to resist infection

Synonyms: withstand, be proof against, combat, weather, endure

Overcome: succeed in dealing with a problem or difficulty

Example: She worked hard to overcome her paralyzing shyness

Synonyms: get the better of, prevail over, control, get/bring under control