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Amazon documents reveal company’s strategy to dodge India’s regulators

140 points by chanmad29 6y ago

newbie578 6y ago
It disturbs me that with each day, it seems like the Great Chinese Firewall was a good solution. You keep out the foreign competition letting internal competition foster and you stop a capital drain. Imagine if the EU had it’s own Alibaba, Baidu or WeChat... That is a lot of taxpaying money...
- neither_color 6y ago
  I wonder about this. China has its own app ecosystem, as does Russia. India is pushing towards having its own as well. What about Europe? Is it harder because you have to localize to so many languages?
  - BugWatch 6y ago
    That, and the inter-cultural differences are certainly a large stumbling block.
  - rini17 6y ago
    Yes the EU single market works well for goods, but not so much for services. Not just languages, there are significant law differences as well.
  - evnix 6y ago
    no that doesn't seem like the reason, India has more languages than Europe and Europe has mainly two writing systems Cyrillic and Latin while India has a lot more. If India can do it with such low resources, so can Europe. In my opinion, China and Russia have their own ecosystems because of the language barrier and the physical firewall that their respective governments have put in. India is able to build its own eco system because it has got the fundamentals right, it probably is the only country which broke the Master Card and Visa duopoly allowing local vendors to slash costs by a good margin. I already see a lot of Apps which might pose a threat to the likes of Google in the coming decade(if they are not bought over) but in the long run, I don't see India having a separate ecosystem, India and it's way of thinking is more like the west than it seems to be and it will eventually merge in with larger western ecosystem.
    - mangatmodi 6y ago
      Actually English is the most common language across India. Majority of the app ecosystem in India is English only. In Europe, majority of people can't read English at all. I mean atleast people from Germany, Spain, Italy and France.
  - yorwba 6y ago
    It's not localization that's stopping European companies from taking over the entire EU market, it's competition from other companies. If a French company wants to expand into the Spanish market, they can localize their app all they want; if their prospective customers in Spain are already using a different app that works just as well, they're going to have a hard time convincing them to switch. The same dynamic also applies within countries, where two interchangeable apps might dominate in different areas or demographics of the same country, without either able to gain significant market share from the other, but it's a bit rarer because of network effects, where people start using an app because they know someone else using it and the app with the most users grows the fastest, eclipsing the competition. Cross-border network effects in Europe are much weaker than within countries, and not much stronger than between European and non-European countries, so if a company manages to dominate their niche across all of Europe, they'll probably also win in much of the rest of the world.
    - dexen 6y ago
      >It's not localization that's stopping European companies from taking over the entire EU market It very much is about localization - both language and to some extent also culture. Both are notable problems with b2c, and there are no "good enough" automated solutions. My point of reference is the success of Polish domestic "Allegro" ecommerce platform, which was able to out-fox EBay, and later on Amazon, and still maintains dominant position on the local market. There were no significant technological advantages, nor any notable political connections. The platform won purely on being local. In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic. And while it's possible to browse foreign offers, it's rather rare to do so - due to the language barrier.
      - yorwba 6y ago
        > My point of reference is the success of Polish domestic "Allegro" ecommerce platform, which was able to out-fox EBay, and later on Amazon, and still maintains dominant position on the local market. Were eBay and Amazon unable to translate their websites into Polish quickly enough for some reason? I just checked https://ebay.pl https://ebay.pl and http://www.amazon.pl http://www.amazon.pl , the latter of which redirects to amazon.de with language set to pl_PL, but nonetheless appears fully translated into Polish. > There were no significant technological advantages, nor any notable political connections. The platform won purely on being local. To be clear, I'm not saying that being local doesn't matter. What I'm saying is that localization (in the sense of translating and adapting the website to local preferences) is the least hurdle in becoming local. The much bigger hurdle is acquiring local customers who are already used to local services. Either you have an obviously superior product that local competitors can't match (unlikely for run-of-the-mill online stores) or you're fighting an uphill battle. > In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic. My guess is that there are Czechs and Ukrainians in Poland who got familiar with Allegro there and spread it via word of mouth. (I could not find a Czech or Ukrainian version of allegro.pl, so are they using the Polish site?) On the other hand there are likely many more Poles in Germany than Germans in Poland, so Poles would be more familiar with German services than Germans with Polish services. (Case in point: the redirect from amazon.pl to .de)
- SpicyLemonZest 6y ago
  This article focuses on Amazon, but the Indian native company Flipkart is facing the same challenges. As the article hints at, these regulations are set up specifically to prevent internal competition; the Indian government wants to protect traditional retail networks against competition from online stores.
  - unmole 6y ago
    > the Indian government wants to protect traditional retail networks against competition from online stores. Nope, the government wants to protect Jio from global competition.
    - kevinkeller 6y ago
      The regulation will also benefit other smaller players, no? For example, Tata Cliq, Snapdeal.
- 908B64B197 6y ago
  These EU giants wouldn't pay anymore taxes than the current tech giants do. If Europe wants to compete, why not simply create an ecosystem where Europeans companies can succeed?
- toast0 6y ago
  Setting up economic protectionism props up the local industry, which usually results in consumers paying more for lower quality products. If done well, protectionism can get a local industry started, and be relaxed over time as the local industry starts to become competitive with global industry. Done poorly, protectionism results in a local market that is a decade behind the state of the art (like Brazil's video game industry was)
suyash 6y ago
Amazon being shady with government what's new. It's a monopoly and only care about itself.
- bigphishy 6y ago
  But the question remains unanswered, is this behavior we should expect or reward when it is one of the world's largest and most influential actors?
- KorematsuFred 6y ago
  I am not sure why Amazon should care about anyone other than itself. To make profits though they have to serve an ordinary blok like me.
  - suyash 6y ago
    we all know what happens when companies sacrifice everything for profit - not good!
    - KorematsuFred 6y ago
      None of that makes sense to me. Which company out there is not working for a profit ? Which company has to "sacrifice" anything for profits ? Amazon is working hard to get things to our doorstep for real low prices, is that a sacrifice ?
- KorematsuFred 6y ago
  There is absolutely no evidence that Amazon is a monopoly in India, Flipkart is their main competitor and e-commerce is one of the hottest markets in India we increasing competition from all sides. There is no evidence that Amazon will make any profits either from India for foreseeable future. Indian people should ask why Indian government is creating laws that need "evasion", that too from a massively successful, well respected and very innovative company, Amazon wants to invest in India and India needs to change its laws if needed to welcome more investment and more competition. Perhaps it is the indian government that is wrong here?
deleted 6y ago
[deleted]
swayvil 6y ago
Every corporation seeks, ultimately, to dodge regulations, dominate the government and establish a monopoly. And we let these beasts run around willy-nilly.
ipsocannibal 6y ago
Yet more evidence to be used in the eventual US anti-trust case demonstrating a pattern of anti-competitive behavior. Prefering big sellers and lying about it is not "customer centric" in any market. Actions like this are going to eventually crush the stock value. When that happens senior employees will cash out and retail will be sold off to the highest bidding hedge fund. AWS is the money maker anyway and that will be protected at all costs.
- throwaw4ybio 6y ago
  They should be careful not to cross into Icarus territory.
- throwaway20875 6y ago
  >Yet more evidence to be used in the eventual US anti-trust case demonstrating a pattern of anti-competitive behavior Little chance. Bezos has purchased his way into the class of decision makers in this country through acquisitions of media and integrating into the military industrial complex (in numerous ways). Amazon embodies the privatization of a centralized economy more than anything else. Needless to say: this is not good.
kmeisthax 6y ago
I'm starting to think the reason why tech companies are so well-valued is purely due to regulatory evasion skills and a dash of political engineering. Effectively, every tech company has been given a pass on something. Facebook doesn't have to worry about defamation lawsuits. Google doesn't have to worry (as much) about copyright. Amazon built it's business on evading sales tax. Uber broke the back of your local city's taxi medallion scheme. And so on and so forth. All of those are things their legacy competitors have had to spend millions of dollars on compliance for, but tech companies don't. Here's the thing: the market really does not give two shits about "smarts". You can engineer the best mousetrap in the world and get it into everyone's homes, but the market won't care about the company that makes them... as much as they will care about a company that's found a way to break the rules. That's what they really want. People in tech are being paid massively not because they're postdocs with good credentials and amazing skills, but because they know how to bend governments to their will.
- lupire 6y ago
  This isn't a webtech thing. Look at Superfund as one of many examples of the conventional wisdom that business winnby cheating. Most theft in USA is wage theft by employers. Corporations are constantly getting caught breaking the law and not getting punished, defrauding customers or polluting the environment. Sports stadiums being built my governments and given away to corporations.
  - missedthecue 6y ago
    "Most theft in USA is wage theft by employers" This is something I hear repeated ad infinitum on the net, but has a calculation ever been done the other way? That is, workers stealing from employers by deliberately clocking out early/late, or by goofing off on HN while on the clock. I would hazard a guess that this number is an order of magnitude greater than seedy business owners short changing their staff.
    - WrtCdEvrydy 6y ago
      Yeah, the guy mowing the lawn and getting dicked on overtime is totally goofing off on HN
bruceb 6y ago
Anyone who has purchased an electronic or smaller household appliance on Amazon.in would know Cloudtail made up a significant portion of over all sales. The Govt didn’t needed a multi year report to know it wasn’t small sellers making most sales. Some in position of power benefited. Side note, Even with Walmart’s purchase of Flipkart a couple years ago, Amazon.in always seems to be cheaper. Also there is huge gap in reviews and review quality between the sites. Walmart still playing catch up 3 years later
blueblisters 6y ago
Ooh this is going to ruffle some feathers in the Indian Traders lobby. Although more regulation here is almost certainly going to be bad for consumers.
teatree 6y ago
This article looks at data without understanding the reason behind it. Many educated Indians choose to buy from these 33 Amazon owned / equity linked sellers because of the experience they offer - odds of receiving wrong/damaged product is low, and in case where that happens the return / replacement process is hassle free. Amazon has brought price discovery to many product categories in India. For expensive products I check Amazon's ClouldTail / Appario seller's price before making a purchase from even local vendors, keep that as a reference and negotiate. Eg: Every computer component, laptop has a ridicules MRP (Maximum Retail Price) in India. A RAM module sold at INR 5500 has an MRP of INR 20,500. The sad part is even companies like AMD collude with distributors in cheating end customers. Instead of fixing problems which makes citizens flock to few sellers at Amazon every Indian government irrespective of political party chooses to appease the voting block of traders union - who are nothing but middle men making prices expensive to the end consumer. A country grows when builders and innovators contribute to the economy, not leeches who don't even understand what they are selling. Everyday I lose a little hope of India ever becoming a developed country, we have our priorities backwards.
- deleted 6y ago
  [deleted]
- thethought 6y ago
  I unerstood your frustration. But can bribe be fair based on it’s potential to offer better experience — just for educated people ?
  - teatree 6y ago
    The poor get swindled most by retailers. Small and large retailers bribe too, but with cartels, vote bank politics and threats of violence. Should the end customer eternally pay for these middle men because they bribe politicians and use emotional language to hide their willful incompetence ? Retail sells 10x Amazon yet refuse to organize or make use of efficiencies of scale. India is a poor country yet pay more than many developed countries for the same products because of dumb short term policies and protectionism. Creative destruction is important.
cccc4alll 6y ago
Amazon's initial business advantage was avoiding state/local sales taxes. Most of tech valuation advances are about avoiding/bypassing regulations and taxation. They simply call it innovation and efficiency.

140 points by chanmad29 6y ago

It disturbs me that with each day, it seems like the Great Chinese Firewall was a good solution. You keep out the foreign competition letting internal competition foster and you stop a capital drain. Imagine if the EU had it’s own Alibaba, Baidu or WeChat... That is a lot of taxpaying money...

neither_color 6y ago
I wonder about this. China has its own app ecosystem, as does Russia. India is pushing towards having its own as well. What about Europe? Is it harder because you have to localize to so many languages?
- BugWatch 6y ago
  That, and the inter-cultural differences are certainly a large stumbling block.
- rini17 6y ago
  Yes the EU single market works well for goods, but not so much for services. Not just languages, there are significant law differences as well.
- evnix 6y ago
  no that doesn't seem like the reason, India has more languages than Europe and Europe has mainly two writing systems Cyrillic and Latin while India has a lot more. If India can do it with such low resources, so can Europe. In my opinion, China and Russia have their own ecosystems because of the language barrier and the physical firewall that their respective governments have put in. India is able to build its own eco system because it has got the fundamentals right, it probably is the only country which broke the Master Card and Visa duopoly allowing local vendors to slash costs by a good margin. I already see a lot of Apps which might pose a threat to the likes of Google in the coming decade(if they are not bought over) but in the long run, I don't see India having a separate ecosystem, India and it's way of thinking is more like the west than it seems to be and it will eventually merge in with larger western ecosystem.
  - mangatmodi 6y ago
    Actually English is the most common language across India. Majority of the app ecosystem in India is English only. In Europe, majority of people can't read English at all. I mean atleast people from Germany, Spain, Italy and France.
- yorwba 6y ago
  It's not localization that's stopping European companies from taking over the entire EU market, it's competition from other companies. If a French company wants to expand into the Spanish market, they can localize their app all they want; if their prospective customers in Spain are already using a different app that works just as well, they're going to have a hard time convincing them to switch. The same dynamic also applies within countries, where two interchangeable apps might dominate in different areas or demographics of the same country, without either able to gain significant market share from the other, but it's a bit rarer because of network effects, where people start using an app because they know someone else using it and the app with the most users grows the fastest, eclipsing the competition. Cross-border network effects in Europe are much weaker than within countries, and not much stronger than between European and non-European countries, so if a company manages to dominate their niche across all of Europe, they'll probably also win in much of the rest of the world.
  - dexen 6y ago
    >It's not localization that's stopping European companies from taking over the entire EU market It very much is about localization - both language and to some extent also culture. Both are notable problems with b2c, and there are no "good enough" automated solutions. My point of reference is the success of Polish domestic "Allegro" ecommerce platform, which was able to out-fox EBay, and later on Amazon, and still maintains dominant position on the local market. There were no significant technological advantages, nor any notable political connections. The platform won purely on being local. In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic. And while it's possible to browse foreign offers, it's rather rare to do so - due to the language barrier.
    - yorwba 6y ago
      > My point of reference is the success of Polish domestic "Allegro" ecommerce platform, which was able to out-fox EBay, and later on Amazon, and still maintains dominant position on the local market. Were eBay and Amazon unable to translate their websites into Polish quickly enough for some reason? I just checked https://ebay.pl https://ebay.pl and http://www.amazon.pl http://www.amazon.pl , the latter of which redirects to amazon.de with language set to pl_PL, but nonetheless appears fully translated into Polish. > There were no significant technological advantages, nor any notable political connections. The platform won purely on being local. To be clear, I'm not saying that being local doesn't matter. What I'm saying is that localization (in the sense of translating and adapting the website to local preferences) is the least hurdle in becoming local. The much bigger hurdle is acquiring local customers who are already used to local services. Either you have an obviously superior product that local competitors can't match (unlikely for run-of-the-mill online stores) or you're fighting an uphill battle. > In spite all the local success the platform could not expand to the west of Poland due to localization (language and partly culture). It did expand a little bit to Ukraine and Czech Republic. My guess is that there are Czechs and Ukrainians in Poland who got familiar with Allegro there and spread it via word of mouth. (I could not find a Czech or Ukrainian version of allegro.pl, so are they using the Polish site?) On the other hand there are likely many more Poles in Germany than Germans in Poland, so Poles would be more familiar with German services than Germans with Polish services. (Case in point: the redirect from amazon.pl to .de)
SpicyLemonZest 6y ago
This article focuses on Amazon, but the Indian native company Flipkart is facing the same challenges. As the article hints at, these regulations are set up specifically to prevent internal competition; the Indian government wants to protect traditional retail networks against competition from online stores.
- unmole 6y ago
  > the Indian government wants to protect traditional retail networks against competition from online stores. Nope, the government wants to protect Jio from global competition.
  - kevinkeller 6y ago
    The regulation will also benefit other smaller players, no? For example, Tata Cliq, Snapdeal.
908B64B197 6y ago
These EU giants wouldn't pay anymore taxes than the current tech giants do. If Europe wants to compete, why not simply create an ecosystem where Europeans companies can succeed?
toast0 6y ago
Setting up economic protectionism props up the local industry, which usually results in consumers paying more for lower quality products. If done well, protectionism can get a local industry started, and be relaxed over time as the local industry starts to become competitive with global industry. Done poorly, protectionism results in a local market that is a decade behind the state of the art (like Brazil's video game industry was)

suyash 6y ago

Amazon being shady with government what's new. It's a monopoly and only care about itself.

bigphishy 6y ago
But the question remains unanswered, is this behavior we should expect or reward when it is one of the world's largest and most influential actors?
KorematsuFred 6y ago
I am not sure why Amazon should care about anyone other than itself. To make profits though they have to serve an ordinary blok like me.
- suyash 6y ago
  we all know what happens when companies sacrifice everything for profit - not good!
  - KorematsuFred 6y ago
    None of that makes sense to me. Which company out there is not working for a profit ? Which company has to "sacrifice" anything for profits ? Amazon is working hard to get things to our doorstep for real low prices, is that a sacrifice ?
KorematsuFred 6y ago
There is absolutely no evidence that Amazon is a monopoly in India, Flipkart is their main competitor and e-commerce is one of the hottest markets in India we increasing competition from all sides. There is no evidence that Amazon will make any profits either from India for foreseeable future. Indian people should ask why Indian government is creating laws that need "evasion", that too from a massively successful, well respected and very innovative company, Amazon wants to invest in India and India needs to change its laws if needed to welcome more investment and more competition. Perhaps it is the indian government that is wrong here?

deleted 6y ago

[deleted]

swayvil 6y ago

Every corporation seeks, ultimately, to dodge regulations, dominate the government and establish a monopoly. And we let these beasts run around willy-nilly.

ipsocannibal 6y ago

Yet more evidence to be used in the eventual US anti-trust case demonstrating a pattern of anti-competitive behavior. Prefering big sellers and lying about it is not "customer centric" in any market. Actions like this are going to eventually crush the stock value. When that happens senior employees will cash out and retail will be sold off to the highest bidding hedge fund. AWS is the money maker anyway and that will be protected at all costs.

throwaw4ybio 6y ago
They should be careful not to cross into Icarus territory.
throwaway20875 6y ago
>Yet more evidence to be used in the eventual US anti-trust case demonstrating a pattern of anti-competitive behavior Little chance. Bezos has purchased his way into the class of decision makers in this country through acquisitions of media and integrating into the military industrial complex (in numerous ways). Amazon embodies the privatization of a centralized economy more than anything else. Needless to say: this is not good.

kmeisthax 6y ago

I'm starting to think the reason why tech companies are so well-valued is purely due to regulatory evasion skills and a dash of political engineering. Effectively, every tech company has been given a pass on something. Facebook doesn't have to worry about defamation lawsuits. Google doesn't have to worry (as much) about copyright. Amazon built it's business on evading sales tax. Uber broke the back of your local city's taxi medallion scheme. And so on and so forth. All of those are things their legacy competitors have had to spend millions of dollars on compliance for, but tech companies don't. Here's the thing: the market really does not give two shits about "smarts". You can engineer the best mousetrap in the world and get it into everyone's homes, but the market won't care about the company that makes them... as much as they will care about a company that's found a way to break the rules. That's what they really want. People in tech are being paid massively not because they're postdocs with good credentials and amazing skills, but because they know how to bend governments to their will.

lupire 6y ago
This isn't a webtech thing. Look at Superfund as one of many examples of the conventional wisdom that business winnby cheating. Most theft in USA is wage theft by employers. Corporations are constantly getting caught breaking the law and not getting punished, defrauding customers or polluting the environment. Sports stadiums being built my governments and given away to corporations.
- missedthecue 6y ago
  "Most theft in USA is wage theft by employers" This is something I hear repeated ad infinitum on the net, but has a calculation ever been done the other way? That is, workers stealing from employers by deliberately clocking out early/late, or by goofing off on HN while on the clock. I would hazard a guess that this number is an order of magnitude greater than seedy business owners short changing their staff.
  - WrtCdEvrydy 6y ago
    Yeah, the guy mowing the lawn and getting dicked on overtime is totally goofing off on HN

bruceb 6y ago

Anyone who has purchased an electronic or smaller household appliance on Amazon.in would know Cloudtail made up a significant portion of over all sales. The Govt didn’t needed a multi year report to know it wasn’t small sellers making most sales. Some in position of power benefited. Side note, Even with Walmart’s purchase of Flipkart a couple years ago, Amazon.in always seems to be cheaper. Also there is huge gap in reviews and review quality between the sites. Walmart still playing catch up 3 years later

blueblisters 6y ago

Ooh this is going to ruffle some feathers in the Indian Traders lobby. Although more regulation here is almost certainly going to be bad for consumers.

teatree 6y ago

This article looks at data without understanding the reason behind it. Many educated Indians choose to buy from these 33 Amazon owned / equity linked sellers because of the experience they offer - odds of receiving wrong/damaged product is low, and in case where that happens the return / replacement process is hassle free. Amazon has brought price discovery to many product categories in India. For expensive products I check Amazon's ClouldTail / Appario seller's price before making a purchase from even local vendors, keep that as a reference and negotiate. Eg: Every computer component, laptop has a ridicules MRP (Maximum Retail Price) in India. A RAM module sold at INR 5500 has an MRP of INR 20,500. The sad part is even companies like AMD collude with distributors in cheating end customers. Instead of fixing problems which makes citizens flock to few sellers at Amazon every Indian government irrespective of political party chooses to appease the voting block of traders union - who are nothing but middle men making prices expensive to the end consumer. A country grows when builders and innovators contribute to the economy, not leeches who don't even understand what they are selling. Everyday I lose a little hope of India ever becoming a developed country, we have our priorities backwards.

deleted 6y ago
[deleted]
thethought 6y ago
I unerstood your frustration. But can bribe be fair based on it’s potential to offer better experience — just for educated people ?
- teatree 6y ago
  The poor get swindled most by retailers. Small and large retailers bribe too, but with cartels, vote bank politics and threats of violence. Should the end customer eternally pay for these middle men because they bribe politicians and use emotional language to hide their willful incompetence ? Retail sells 10x Amazon yet refuse to organize or make use of efficiencies of scale. India is a poor country yet pay more than many developed countries for the same products because of dumb short term policies and protectionism. Creative destruction is important.

cccc4alll 6y ago

Amazon's initial business advantage was avoiding state/local sales taxes. Most of tech valuation advances are about avoiding/bypassing regulations and taxation. They simply call it innovation and efficiency.