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With continuous talks on the deal to buy majority stake in Flipkart, Walmart Inc. may complete the agreement in the next two weeks for at least $12 billion. Walmart has struggled against Amazon as consumers increasingly migrate to online commerce but if this deal is completed, they would have a substantial foothold in an emerging market of 1.3 billion people. Here's more details on how this deal is expected to impact India.
About Walmart in India Today:
- Walmart has been in India for 20 years as a B2B (wholesale) player, since FDI regulations restrict them from doing B2C business.
- They have a turnover of around Rs 5000 crore from its business with SMEs, hotels, and retailers, in India today
- Walmart’s Flipkart deal is their obvious entry to the country’s B2C market.
- Analysts believe this deal will enable the robust growth of ecommerce in India
What the deal means for Indian consumers:
- Better prices: Like Reliance and DMart, Walmart is not concerned about GMV. Globally, Walmart’s key to success has been its low prices to the customers. Expectations are the same for India.
- Efficient logistics: While Amazon has the quick delivery option with their Prime membership, Flipkart has struggled. Walmart already has a strong presence in B2B and the tools to out perform Amazon on this front.
- Omnichannel growth: Given the power of infrastructure that Walmart already has, in the long run, the company will possibly want to push deeper into an omnichannel strategy
- Empowering Channel Partners: In the US, Walmart enables the customer to ‘click and collect’ from more than 1,000 of its stores across the country. It can be possible in a few years as Walmart already has the prototype.
- Large scale operations for Groceries: Walmart will push towards developing a stronger storage, inventory and logistics
Source for this research: The Economic Times, NDTV Online and YourStory.
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