The e-commerce business can’t be simply portrayed as ordering from the website, mobile apps, shipping and delivery, it’s beyond all of them. It’s a complete business. We can see, Number One Fortune 500 Company entered directly into an e-commerce platform, that too in India.
It is a turning point in the e-commerce industry. Indian retail market is huge and has a good pierce amongst consumers. The recent announcement that the biggest retail company Walmart has confirmed the acquisition of a 77% stake in Flipkart for $16 billion has set the e-commerce platform on fire. This is the biggest merger and acquisition in presence of the largest US-based retail company in India. Thus, turning India to stand in the largest internet economies of India.
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This deal is a thriving moment for all the Indian start-ups and venture capital ecosystem. It’s a bizarre victory for all those start-ups which started a long decade ago but couldn’t grow because of major start-ups.
Importance of Walmart-Flipkart Deal
This deal recreates the platform of e-commerce in India as Walmart is turning against Amazon, its major rival in the US. This deal may escalate the possibility of a battleground between the two biggest retail companies. So for now, India will be dominated by the two biggest US-based companies although this deal is favouring Flipkart and all its stakeholders.
The Significance of the deal for Walmart
For Walmart, this deal is basically a fight for everything that it has built in last 5 decades and to become the major in global e-commerce.
Perks of deal
All of its stakeholders, employees, founders, investors and current employees have gained so much; they have become a millionaire overnight.
Some examples can be noted as Tiger Global Management, Accel Partners, and even late-stage investor.
The rise in Indian start-up ecosystem
All those who were setting an eye on India for investment, will get a very nice platform which will result in a boost of funds. Venture capital ecosystem has also received a hike from this deal and can be powered in another decade.
The Turning point for e-commerce in India
For India, it’s a loss as well as gain because of this deal. The buyout of Flipkart will mark the victory for Indian Start-up companies. It also shows the supremacy of two based retail companies in India and Indian online retail business will be controlled by them.
India will have a good variety and quality of products. The options for the consumers will be widened with the increasing presence of Walmart and Amazon in the domestic space.
A player like an Amazon has made its supply available in even remote parts of the area so Walmart also has to spend the amount in order to equalize in the field of business.
The Flipkart-Walmart deal will increase the supply chain which creates many jobs in future.
Walmart offers the product at low prices which will help to increase the volumes as low price increase the demand.
No one is less
Walmart has grown its retail business by using the technology in a certain way whereas Amazon has become the forefront in using technology to enhance its customer service in online business.
Amazon is promoting online and offline sales too. Its Go store in Seattle which is based on the concept of Go shop leaves without standing in the counter line to pay the bill as their account automatically gets charged through their amazon prime app. Thus, enhancing the customers experience and challenging the incumbent in the motor and brick retails platform.
Walmart, on the other hand, acquisition of jet.com and thus reaches to the urban population. Walmart doesn’t have much presence and its retail pierce was low. Flipkart may face the same outcomes though historically, Walmart as the fastest growing brick and retail company is famous for its low price supply and an amazing customer service with proper logistics, product assortment etc. Thus, Walmart capabilities will be available for Flipkart to manage its internal business strategies and offer a discount to majority discount lover people in India.
Low price generally increases the supply which can create a higher scale of economy. Therefore a change in ownership will improve the Flipkart business deal.
Online shopping will become an attractive channel for people buying any essentials or luxuries.
