Why Walmart's Flipkart acquisition is its admission of defeat in India

Walmart Inc. might want to portray its $16 billion purchase of India's largest e-commerce firm, Flipkart Group, as a brilliant strategic move, long-planned in secret, that would allow the U.S. retail giant to manage the transition away from big-box stores globally. Yet, the truth is that the deal represents a second-best outcome -- if that -- for Walmart as well as for Indian consumers and farmers.

In the 11 years that Walmart has operated in India, it’s signally failed to build up its own business. That’s not entirely the company’s fault. In fact, it’s a reminder that India remains, in some ways, as inhospitable to foreign businesses as the People's Republic of China.

For over a decade, successive Indian governments have denied permission to Walmart -- and peers such as Carrefour SA -- to open up their own stores. Foreign investors can enter into partnerships with local retailers -- Walmart had one with Bharti Enterprises Pvt. Ltd. -- but they can't control the consumer-facing end of the business, and their supply chains are subject to fearsome additional regulations. When foreign investment in supermarkets was finally permitted in 2012, for example, the previous government required any major, foreign-backed outlets to source 30 percent of the processed or manufactured goods they sold -- by value -- from tiny Indian enterprises worth less than $1 million apiece. The government also blocked companies such as Walmart from expanding into small-town India, restricting them to cities with populations over 1 million people.

Cryptocurrency chaos as China cracks down on initial coin offerings

China's move last week to ban initial coin offerings (ICO) has caused chaos among start-ups looking to raise money through the novel fund-raising scheme, prompting halts, about-turns and re-thinks.

China is cracking down on fundraising through launches of token-based digital currencies, targeting ICOs in a market that has ballooned this year in what has been a bonanza for digital currency entrepreneurs.

The boom has fuelled a jump in the value of cryptocurrencies, but raised fears of a potential bubble.

"This is not unlike the dotcom bubble of 2000," said a partner at a venture capital fund in Shanghai, who didn't want to be named because of the issue's sensitivity. "There are a lot of companies raising a lot of money for not very good ideas, and these will eventually be weeded out. But even from the big dotcom bust, you still have gems."

"One of the reasons regulators stepped in was that the ICO fever extended beyond the traditional crypto community. The timing was an attempt to pre-empt this before it goes into a much broader mass market in China," the partner said.

Investors in China contributed up to 2.6 billion yuan ($394 million) worth of cryptocurrencies through ICOs in January-June, according to a state-run media report citing National Committee of Experts on Internet Financial Security Technology data.

Pre-ICO roadshows featuring elaborate standing room-only presentations at 5-star hotels drew a diverse crowd, including grandmothers - a likely tipping point for regulators.

The hype and subsequent crackdown came as China focuses on economic and social stability ahead of next month's congress of the Communist Party, a once-in-five-years event.
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