This is what Flipkart, Walmart got from $16 bn, world's biggest e-commerce deal

Walmart buyout could be the best thing that can happen to Flipkart. And for Walmart too. India’s most valued e-commerce firm can teach a thing or two about e-commerce to the 50 years plus old Walmart, which has redefined brick-and-mortar retail industry in the US. In its own admission, Walmart clearly doesn’t know much about online retailing, something that was sort of invented by Amazon, now its key rival in India. “We’re learning how to deal with higher volumes and learning how to deal with a higher peak than what we had previously,” Walmart chief executive officer Doug McMillon told analysts during a conference call in February.

Walmart’s “operational challenges” on the e-commerce front came to the fore when its fulfillment centres couldn’t handle the huge inflows of electronics, toys and some seasonal items during the holiday season leading to unfulfilled sales. Walmart has been investing heavily in e-commerce, buying portals like Jet.com and online clothing retailers Bonobos and Modcloth much like Flipkart acquired Jabong and Myntra.

But analysts have always been sceptical about Walmart’s ability to integrate these acquisitions into an integrated online retail strategy. And its fulfilment fiasco was heavily punished at the bourse. While Walmart has been here for some time, its India team has little knowledge about the retail market. Walmart India, a wholly-owned subsidiary of Walmart owns and operates 21 wholesale stores across India, selling only to registered resellers.

Surely, Flipkart can teach McMillon something about how to succeed in e-commerce market place in India and elsewhere. The Bansals, likewise, would be wiser, getting some knowledge about how to sell groceries online, something rival Amazon is betting big on.

Beyond smartphones and consumer durables, grocery items is the biggest opportunity for online retailing in India, which is currently dominated by offline channels.

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With AmazonFresh, Flipkart’s rival plans to deliver every item of food and consumable to a customer’s plate in near future. While Walmart hasn’t reached where Amazon is in their home turf, both are now engaged in a fierce battle to get a bigger share of American household’s daily budget.

Source: DNA Money