Walmart Enters India’s Biggest E-Commerce Market
Finally Walmart is Buy Already India’s Flipkart with $16 billion (Rs1 lakh crore)
Flipkart is India’s First billion-Dollar e-commerce Company, Flipkart, sells 8 Million Products Across 80 – Plus Categories. It Has 100 Million Registered Users. Flipkart Gives Walmart Access to A Market it Has Been Trying To Crack For Years. This Arkansas-based Retailer Has Been Restricted By Local Regulations To Operating Wholesale Outlets in The World’s Fastest Growing Economy.
Now Walmart a Decade of Struggles—including A Failed partnership and policies that Marginalised it— To Finally Get A Real Shot at India’s Booming e-commerce Market.
On May 09, Walmart Said it Will Buy A 77% Stake in leading Indian e-commerce firm Flipkart for $16 billion (over Rs1 lakh crore). While the Bengaluru-headquartered company Will Retain its Brand and Operating Structure, Flipkart will Work Closely With its New Parent Going Forward. However, Walmart’s investors in the US are hardly the most excited bunch. On the day of the announcement, Walmart’s stock fell as Much as 4% on The New York Stock Exchange.
Call With Analysts On May 09, Walmart’s Management Team Made A case for its play in India’s e-commerce market, which is Expected To Touch $200 billion On 2026. Walmart CEO Doug McMillon and COO Judith McKenna Stressed on three main reasons: Flipkart’s leadership in some lucrative segments, its payments platform, and the company’s talent pool.
India has had several large, homegrown supermarkets and departmental store chains, including Reliance Retail, Aditya Birla, Future Group, and Avenue Supermarts, for years now. Still, unorganised players hold about 90% of the country’s retail market. That’s because consumers in Asia’s third-largest economy prefer shopping at local shops or markets, where standalone stores sell everything from goods of daily use to clothes.
But the prospects for the larger chains have started improving, backed by a shift towards organised retail, better business models, changing demographics, and rising per capita income. Over the last few years, retailers have also shifted their focus from expanding stores to profitability. In the process, they have hived off businesses, lowered debt, and exited unviable assets.
“The Indian organised retail sector has seen a dream run in the past 1.5 years,” analysts at brokerage firm Jefferies said in an April 12 note. India’s retail market, online and offline together, is expected to reach $1 trillion by 2020, according to a 2017 report from industry body Assocham. Another 50 Such stores in the next five years.
However, Foreign Firms Cannot extend their Physical Presence Beyond the wholesale market. Walmart, for instance, operates 21 cash-and-carry stores that service small Businesses and mom-and-pop shops. Although Biyani has indicated that he may bring On Board a “strategic investor” for his Business, the Veteran Feels his Group Has A well-diversified business to take on global giants.
Offline to online
have swamped the market with hefty discounts and promotions. To tackle the rising threat, brick-and-mortar retailers have pivoted to an “omni-channel” model, integrating their physical business with an online platform. Some, like Reliance Retail and Tata-owned Trent and Croma, have set up their own online businesses to counter Flipkart and Amazon. Very Huge Retail Market in India.
Despite the stiff competition that Flipkart has faced from its deep-pocketed American rival Amazon, the homegrown company has held its ground and managed to become a leader in the lucrative online fashion and lifestyle category.and then got Myntra to buy fashion e-retailer Jabong in 2016. Flipkart’s own fashion business is also robust, backed by the launch of private labels and low-priced clothing.“However, going forward, these retailers could well benefit from a strong omni-channel strategy.”