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About WS Retail

WS Retail is the front-end retail operations of Flipkart. Flipkart provides movies, music, games, mobiles, cameras, computers, healthcare and personal products, home appliances and electronics on online.

WS Retail Headquarter Location

Ozone Manay Tech Park, #56/18 & 55/09, 7th Floor Garvebhavipalya, Hosur Road

Bengaluru, 560 068,

India

1800 420 1111

Latest WS Retail News

Why did ED send notice to Flipkart warning of a $1.35 billion fine and will Amazon receive similar notice as well?

Aug 18, 2021

By 47 mins ago The ED notice comes at a time when the CCI is conducting its own investigation into Amazon and Flipkart while the government proposes regulatory changes to address the alleged practices. We missed this earlier: India’s Enforcement Directorate (ED) had sent a notice to Flipkart and its founders in July asking them to explain why they should not face a ₹10,000 crore ($1.35 billion) fine for alleged violation of foreign investment rules, Reuters reported on August 5. While retailer bodies have frequently accused Amazon and Flipkart of violating Foreign Direct Investment (FDI) regulations, the ED notice is one of the few instances where a law enforcement agency has made the same accusation and is willing to reprimand the company for it. What was the ED notice regarding? Violations concerning WS Retail: Flipkart and Amazon have been under an ED investigation for years for allegedly bypassing India’s foreign investment regulations, which state that e-commerce entities with foreign investment can only operate as a marketplace for third-party sellers and cannot hold and sell their own inventory to consumers. An ED official told Reuters that the notice was regarding Flipkart selling goods to consumers through a related party, WS Retail, which is prohibited according to the regulations. Another official told NDTV  that Flipkart violated the Foreign Exchange Management Act (FEMA) while attracting foreign investments between 2009 and 2015. What is WS Retail? Founded in 2009 by Flipkart founders Sachin Bansal and Binny Bansal, who later sold it to investors, WS Retail was once the largest seller on Flipkart, accounting for nearly 90% of the sales on the platform at one time. WS Retail stopped selling on Flipkart sometime in 2017-2018. Who was the notice sent to? According to Reuters, the “show cause notice” was sent by ED’s Chennai office to Flipkart, its investors Tiger Global, and its founders Binny Bansal and Sachin Bansal, who have sold most of their stake to Walmart. Walmart, which took a majority stake in Flipkart in 2018, does not appear to be one of the targets of this investigation. The Economic Times reported that the ED notice might have been sent to 10 parties, but no additional names were provided. What did the notice say? The notice asked the recipients to explain why they should not face a ₹10,000 crore fine for violating foreign investment rules, Reuters reported. Flipkart was given 90 days to respond to the notice, the report added. Since the ED does not make its notices public, it is difficult to know what exactly was said. What has Flipkart said? A Flipkart spokesperson told Reuters that the company is in compliance with Indian laws and regulations and that it will cooperate with the authorities. Will Amazon receive a similar notice? We do not know if Amazon has received any similar notices, even though retailer bodies like Confederation of All India Traders (CAIT), All India Online Vendors Association (AIOVA), and Swadeshi Jagaran Manch (SJM) have frequently complained that both Amazon and Flipkart are using complex ownership structures to indirectly sell on their platform through third-party sellers. In a statement welcoming the notice, CAIT demanded that the ED send a similar notice to Amazon as well. “In the case of Flipkart, the company W.S. Retail was owned by both Sachin and Binny Bansal which was selling a major portion of the business of Flipkart whereas in the case of Amazon mostly the goods are being sold by Cloudtail and Appario where Amazon has an equity stake. Since in both cases, the selling parties are related entities, both Amazon and Flipkart have violated the FDI in e-commerce law,” said Praveen Khandelwal, Secretary-General of CAIT. A Reuters investigation revealed in February that Cloudtail and Appario account for nearly 35 percent of the sales on Amazon, and in total, 35 of Amazon’s more than 4,00,000 sellers in India accounted for two-thirds of the sales on the platform. A few days after the Flipkart notice, Amazon on August 9 announced that it has decided to end its seven-year-old joint venture partnership with Catamaran in Prione Business Services, which owns Cloudtail. Although no reason was provided for this decision, experts who spoke to MediaNama suggested that it was the increased regulatory pressure. Will notice affect Sachin Bansal’s banking plans? The ED notice to Flipkart “could handicap co-founder Sachin Bansal’s dream of getting a banking licence,” Mint reported on August 17. “While the Reserve Bank of India may choose to ignore the ED notice to Bansal, it does dampen the chances of his Chaitanya India Fin Credit’s application for a universal banking licence, given that a licence holder needs to meet the regulator’s fit and proper criteria,” the report stated. CCI conducting a separate investigation into Flipkart and Amazon Apart from the ED investigation, the Competition Commission of India (CCI) is also investigating the two e-commerce platforms. The CCI’s probe was ordered  to investigate four alleged violations: Exclusive launch of mobile phones Promoting preferred sellers on their websites Deep discounting practices Prioritizing some seller listings over others Although the probe was initiated in January 2020, a series of legal setbacks put it on hold. On August 9, 2021, few days after the ED notice, the Supreme Court gave CCI the final nod to resume investigations. The CCI probe was initiated following a complaint filed by the Delhi Vyapar Mahasangh (DVM), a group of MSME (Micro, Small and Medium Enterprises) smartphone traders. DVM had accused that Amazon has certain agreements with sellers (that are allegedly controlled by the company) and that it gives these sellers unfair preferential treatment over others. Other trade bodies have also filed complaints against Amazon and Flipkart with CCI. The All India Online Vendors Association (AIOVA), a trade union representing online sellers, filed an antitrust suit against Amazon India in August 2020, alleging preferential treatment to some sellers, and predatory pricing. Changes to e-commerce rules on the horizon The ED notice comes at a time when the government is considering changes to the e-commerce regulations in response to repeated complaints against Amazon and Flipkart. The government on June 21 proposed amendments that give the existing Consumer Protection (E-Commerce) Rules, 2020 more teeth. The proposed changes include new rules to address abuse of FDI regulations, the establishment of a grievance redressal mechanism, new display and labeling criteria for foreign goods, the prohibition of flash sales, introduction of fallback liability, among other things. Many of the proposed changes are in fact aimed at preventing e-commerce platforms from engaging in the alleged practices that the ED and CCI are currently investigating. Also Read

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Expert Collections containing WS Retail

Expert Collections are analyst-curated lists that highlight the companies you need to know in the most important technology spaces.

WS Retail is included in 2 Expert Collections, including E-Commerce.

E

E-Commerce

8,753 items

D

Digital Health

11,292 items

Technologies, platforms, and systems that engage consumers for lifestyle, wellness, or health-related purposes; capture, store, or transmit health data; and/or support life science and clinical operations. (DiME, DTA, HealthXL, & NODE.Health)

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