Flipkart - The Arrowhead for Walmart to Stave Off Amazon’s Conquest of Indian E-Retail Market
2018-05-10 | FMI | Electronics, Semiconductors, and ICT
For years, Walmart has been trying to enter the retail market in India. However, the American multinational retail corporation has remained confined to the ‘cash-and-carry’ wholesale business among foreign investments and stringent restrictions. Through the mega-deal sealed, Flipkart has become the arrowhead for Walmart to penetrate the retail market in India. Flipkart has been acquired for a value of around US$ 16 billion by Walmart to sustain its lead and compete with the leading e-commerce companies such as Amazon, Grofers, and Bigbasket.
Besides increased competitive intensity in the Indian retail market, this acquisition is likely to transform the e-tailing business in the country. To sustain in the competitive market and expand its customer base, Walmart mainly focuses on offering their services and products at reasonable and low prices. In addition, this acquisition will benefit the farmers of the country with better returns and speedy transportation. While the multinational retail corporation is concentrating on inching towards attaining a lead and strengthening its position in the global market, here is how consumers will benefit from this mega-acquisition of Flipkart.
- Omni-Channel Retail Supply:
To sustain its lead in the competitive market, Walmart has continued to invest significantly in advanced technology to provide an enhanced omni-channel experience to its customers. As the consumers in India mainly prefer spending in the brick and mortar stores, Walmart can now conveniently reach out to them through Flipkart and serve in various Indian cities. With the omni-channel experience, consumers in India can conveniently purchase a range of products and satisfy their requirements through online portals.
- Affordable and Discounted Prices:
Walmart mainly offers a range of products at lower and affordable prices to expand its customer base. In addition, the multinational retail corporation is concentrating on expanding its private labels. In order to establish its brand identity and increase the number of returning customers, Walmart is focusing on pushing to offer various products manufactured by various companies and brands at a comparatively lower price and premium quality. This will benefit the customers and allow them to divert their earnings towards savings.
- Quality and Variety:
As Amazon has not stepped into the business of perishable products, the company is concentrating on coordinating with the Indian farmers and offering it directly to the customers. Through eliminating the middlemen from their sales channel, the company is focusing on offering premium quality products at cheaper and reasonable prices. Besides offering various food and consumer products, Walmart is also focusing on diversifying its services towards furniture and various online grocery products. With Flipkart’s acquisition by Walmart, the consumers in India can direct their spending towards a range of quality products.
In essence, the acquisition of Flipkart by Walmart is likely to transform the traditional patterns of the e-tailing business in India. Customers in the country will continue to benefit from this acquisition in terms of prices, variety, convenience, and quality. In order to compete with Amazon and Grofers, Walmart is mainly focusing on encouraging private labels to offer perishable, consumer products, and furniture at cheaper and affordable prices. Through pricing analysis and offering quality products, the company is concentrating on expanding its customer base.