Well as everybody must be aware now that Walmart acquired 77% stakes in Flipkart recently for $16 Bn, which makes it the biggest e-commerce deal in history. Walmart was eyeing India consumer market for a long time, and finally, they have succeeded. This deal is going to change the whole scenario, the biggest retail deal will impact the e-commerce landscape, competition, and the consumers as well. You might think that the e-commerce share in retail would be a lion’s share but it barely made it double figures recently, all this could easily change with the advent of Walmart into India’s e-tailing industry.
If we are not wrong, Amazon tripped the first time they came to Indian shores with Junglee. Walmart had the same experience owing to the economic and political turmoil’s nine years back. Will Walmart be able to capitalize and infiltrate through brand position created by Flipkart? That time would tell but, we think that the price wars and cutthroat competition with Amazon will surely benefit the Indian consumers and certainly will affect retailers around India.
Online sellers jittery
All the sellers on Flipkart are nervous as Walmart might not let them sell further on Flipkart. It doesn’t come as a shock as Walmart has earned a reputation of wiping off small businesses with very competitive prices. They all fear that Walmart might bring in their own branded stuff at very low prices which might hamper the ongoing scenario for small businesses.
Online sellers on other platforms will also get affected by this move and might find themselves in a sticky situation. We suggest massive branding strategies for small businesses so as to place them in a significant position, so that in future they may not have to pay a higher cut on their profit margins.
A boon for consumers
The American giant Walmart, with vast experience in the first-world economy, will turn the tables with extremely low prices and variety of consumer goods. As the competition increases it is absolutely certain that huge discounts and variety of offers are in the cards. In the midst of all these consumers will be benefitted as they will be able to get their hands on foreign consumer goods in their home soil at a very competitive market. After this deal is in effect we are pretty sure that for consumers every day will be a big billion day.
With the entry of another American giant Walmart in the picture, the battle for prowess between Walmart and Amazon will hugely impact the Indian market. Amazon has already announced that it will infuse $5 Bn into Indian operations to gear up for the upcoming competition they are about to face. Expansion of operations will surely bring in more jobs and economic wellbeing, but on the flipside, these big companies have all the more reason to drain Indian consumers of wealth because they have invested so much into our market. Businesses run on profits ultimately, not on emotions. We think that this sudden influx of money into Flipkart shows that Indian consumer market is promising or Walmart has nowhere to go after series of backlashes around the globe.
After defeating from China and fading out in America, Walmart wants to make a stronghold in the Indian market and very rightly so as e-commerce still has not flourished completely in India.
The war between Walmart and Amazon will not only create a huge frame of the supply chain but also a large number of jobs.
Infrastructure and Agriculture sector is predicted to get a big boost due to this competition, farmers will benefit from this huge demand.
Whatever the case may be, this deal has much to do with the urgency Walmart is portraying to serve Indian market. Many prior companies have gone bankrupt thinking the same. Flipkart mind you was a loss-making business for a long time and was saved merely because of series of investment made by Softbank, Naspers’s and Tiger Global. Though their investment in recent times has been fruitful, will Walmart be so lucky that only time will tell?