Sachin Bansal and Binny Bansal founded Flipkart in 2007. Fast forward to some years, the company emerged as one of the top players in the Indian eCommerce market. The company positioned itself as an indigenous substitute to Amazon and presented a variety of products and services to Indian consumers. Flipkart encountered various obstacles en route to its success, including fierce competition, logistical difficulties, and regulatory hurdles. However, the company persisted and became a significant player in the market, ultimately drawing Walmart's attention.
India is among the rapidly expanding eCommerce markets worldwide, with a market size likely to surpass US$ 200 billion by 2026. The struggle for market supremacy between Walmart and Amazon in India intensified Walmart's acquisition of Flipkart. This significant acquisition revolutionized the conventional trends of e-tailing businesses in India and give Walmart a substantial edge in its market share. The growth in the Indian eCommerce market is stimulated by a surge in internet and smartphone penetration, mounting disposable incomes, and shifting consumer behavior.
How did the acquisition give Flipkart the much-needed competitive edge?
Walmart's acquisition of Flipkart assisted the company to capture a significant market share and equip it to compete with Amazon effectively in the Indian market.
Walmart's acquisition of Flipkart enhanced the company's standing in the Indian eCommerce market. Amazon has already invested heavily in India and has established a robust market presence, which may pose a hurdle for Walmart. Moreover, Walmart will have to navigate through India's intricate regulatory environment and surmount logistical challenges to triumph in the market.
Walmart's acquisition of Flipkart represents a significant development in the Indian eCommerce market. The acquisition is set to transform e-tailing businesses in India and provide Walmart with a considerable edge in its market share. However, Walmart may confront multiple challenges in competing with established players such as Amazon and navigating India's intricate regulatory environment. By comprehending the impact of the acquisition and the challenges Walmart faces, we can better grasp the importance of this advancement in the Indian eCommerce market.
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.
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.
