Walmart buys Flipkart: Great discounts coming for buyers soon

Flipkart-Walmart deal: Walmart’s $16 billion majority stake acquisition in Flipkart is set to make shopping much more rewarding for the Indian online consumers. With Jeff Bezos promoted Amazon India challenging Flipkart’s leadership position, the latter is left with no option but to do everything under the sun and maintain/ grow its market share in the $17.8 billion Indian e-commerce industry.

Industry experts said a competition of sorts will begin among top entities like Walmart-Flipkart, Amazon and Paytm-Alibaba on who loses the most (in terms of cash burn) over the next few years.

K Vaitheeswaran, e-commerce pioneer and author of just-released book, Failing to Succeed - The story of India’s first e-commerce company, feels the Walmart-Flipkart deal spells great news for the Indian consumers. “It’s no more a festive season shopping for consumers. For the next five years, it is going to be year-round Diwali. There is Alibaba, Walmart-Flipkart and Amazon who will be vying for market share. All of them will now take an oath saying ‘I will lose more money than you’,” he said, adding that the only beneficiary will be the Indian online shopper.

While consumers can look forward to frequent discount showers, on the operations side, there may not be major drastic changes. That’s because the deal is still to receive regulatory approvals.

However, some of Walmart’s global best practices may get integrated in the initial stages to be able to inch closer to the overall shopping experience that Amazon India offers to online shoppers.

Ankur Bisen, senior vice-president - retail and consumer products division of consulting firm Technopak, said no major changes are expected over the next 12 to 18 months.

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“It will be a gradual integration process starting with specific areas like corporate governance, reporting structure, scrutiny, monitoring and measurement. New developments in terms of offerings, private label, assortment mix, newer categories or for that matter a completely fresh approach to online shopping will be visible post the completion of this deal,” Bisen said.

With retail changing rapidly, Walmart is actively looking for new ways to serve customers and moving with speed.

The Flipkart investment, Walmart said in a statement, represents a unique opportunity, consistent with the approach of looking for innovative ways to grow domestically and internationally, particularly in markets with significant long-term opportunity.

“The Flipkart investment transforms Walmart’s position in a country with more than 1.3 billion people, strong GDP growth, a growing middle class and significant runway for smartphone, internet and e-commerce penetration,” Walmart said.

By Ashish K Tiwari, DNA Money