comscore Flipkart-Walmart acquisition saga nears an end; here's what it means for India's e-commerce sector
News

Flipkart-Walmart acquisition saga nears an end; here's what it means for India's e-commerce sector

Almost as if reacting to this deal, Amazon has pumped Rs 2,600 crore in its India operations.

  • Published: May 9, 2018 1:53 PM IST
flipkart-stock-image

Lately, Flipkart s imminent acquisition by Walmart has hogged all the limelight. Analysts estimate that Walmart is in the process of buying approximately 70 percent stake in Flipkart for somewhere between $14.5-15.5 billion at a valuation of approximately $20 billion. Google parent Alphabet too is expected to buy around 10 percent stake for around $1.5-2 billion. Also Read - Amazon Great Freedom Sale: Best deals on OnePlus 9 Pro, Mi 10i 5G, Galaxy M42, and more

Also Read - You can now ask Alexa to find nearest COVID vaccine or testing centre

While the word acquisition is being bandied around quite a bit, Greyhound Research claims this could be more on the lines of a partnership. “This deal is more inclined to be a partnership than an acquisition, which allows Flipkart to continue operating in a near as-is fashion,” writes Sanchit Vir Gogia, Chief Analyst, Founder and CEO of Greyhound Research. “The company has established partnerships in key markets like Japan (Rakuten), China (JD.com), UK (Sainsbury-ASDA), US (Google) among others.” Also Read - Massive Rs 2,000 flat discount on Xiaomi Mi 11X: Check the mouth-watering deal on Amazon

Post the conclusion of this deal, Flipkart will no doubt gain financial and operational muscle. According to Gogia, Kalyan Krishnamurthy is expected to continue as CEO, and Binny Bansal as the executive chairman. However, Sachin Bansal could finally opt for an exit.

How Flipkart benefits with Walmart

Flipkart is more of a marketplace, while Walmart is more of a logistics and supply chain expert. According to Gogia, Walmart “will be able to extend this expertise to managing physical goods in the digital world a strength that Flipkart lacks. This strength is a significant differentiator in a marketplace dominated by thin margins and worsened by steep discounting policies.”

Gogia adds that Walmart’s expertise in the grocery segment will also benefit Flipkart. “Walmart has exceptional understanding and network in this area and we can well expect the combined entity (under Walmart s guidance) to focus significantly on selling groceries and other agri products via both the Flipkart marketplace and Kirana stores,” Gogia writes.

Impact on Paytm and Amazon

Needless to say, the Flipkart-Walmart deal will also have huge impact on some of the Indian e-commerce site’s rivals especially Amazon India. Others who are likely to feel an impact include Paytm Mall, TataCliq, and Shopclues to name a few. “In the light of this aggressive and head-to-head competition between the Big3 namely Walmart (including Flipkart), Amazon and Alibaba (read Paytm Mall) we can well expect further consolidation and acquisition of specialized eCommerce companies that will allow the Big3 to gain dominant market share in newer segments,” Gogia writes.

Adrian Lee, Research Director, Gartner says, Smaller players constantly face a problem of scaling up their operations. However, this does not mean that they will be forced to exit. The smaller players in many cases are more agile and open to new business models. They should concentrate on specialization within their domains to build up a valuable cache of users seeking differentiated retail experiences.

Amazon India’s reaction

In response, Amazon has reportedly poured in Rs 2,600 crore into its India operations. This is one of the biggest fund infusions by the Seattle-based company, and is said to be for the marketplace business. Amazon India’s new funds come at a time when chief rival Flipkart is set to be acquired Walmart.

The infusion of funds was spotted by ET on Amazon India s filings with the Registrar of Companies. With this, Amazon s total investment into its marketplace business Amazon Seller Services crosses the Rs 20,000 crore mark.

Watch:Amazon Echo Spot First Look

In little over a year, the company has poured in over Rs 10,700 crore into its Indian operations. Back in January, Amazon India had received Rs 1,950 crore from its parent company. A couple of months before, it had received Rs 2,900 crore. Back in 2016, CEO Jeff Bezos had committed to investing $5 billion in Amazon s India operations.

Impact on consumers

The intense competition between e-commerce sites can only come as good news for us consumers. In the quest to constantly outdo each other, consumers could expect deeper discounts, more product categories, and also availability of international brands.

I fully expect discounts/promotions to continue unabated. As the e-commerce players mature into more profitable businesses, it is very unlikely that discounts will stop. More of the promotional support will be passed back to the suppliers who want the user traffic, Lee says.

Gogia also adds, “Another key outcome for the consumers will be better-managed deliveries given the increase in investment in supply chain and infrastructure. This will also translate to the availability of products in Kirana stores which implies better pricing, quicker deliveries and overall better service levels.”

For the latest tech news across the world, latest PC and Mobile games, tips & tricks, top-notch gadget reviews of most exciting releases follow BGR India’s Facebook, Twitter, subscribe our YouTube Channel. Also follow us on  Facebook Messenger for latest updates.
  • Published Date: May 9, 2018 1:53 PM IST



new arrivals in india

Tecno Pova 2
Tecno Pova 2

10,999

Infinix Smart 5A
Infinix Smart 5A

6,499

Micromax In 2b
Micromax In 2b

8,999

Vivo Y72 5G
Vivo Y72 5G

20,990

Tecno Camon 17
Tecno Camon 17

12,999

Tecno Camon 17 Pro
Tecno Camon 17 Pro

16,999

Realme C11 2021
Realme C11 2021

6,999

Oppo Reno6 Pro 5G
Oppo Reno6 Pro 5G

39,990

Oppo Reno6 5G
Oppo Reno6 5G

29,990

Samsung Galaxy M21 2021
Samsung Galaxy M21 2021

12,499

OnePlus Nord 2
OnePlus Nord 2

27,999

Poco F3 GT
Poco F3 GT

27,999

Samsung Galaxy A22 5G
Samsung Galaxy A22 5G

19,999

Xiaomi Redmi Note 10T 5G
Xiaomi Redmi Note 10T 5G

13,999

Samsung Galaxy F22
Samsung Galaxy F22

12,499

Xiaomi Mi 11 Lite
Xiaomi Mi 11 Lite

21,999

Infinix Note 10 Pro
Infinix Note 10 Pro

16,999

Infinix Note 10
Infinix Note 10

10,999

Vivo Y73
Vivo Y73

20,990

OnePlus Nord CE 5G
OnePlus Nord CE 5G

22,999

iQOO Z3
iQOO Z3

19,990

Realme C25s
Realme C25s

9,999

Poco M3 Pro 5G
Poco M3 Pro 5G

13,999

Realme X7 Max 5G
Realme X7 Max 5G

26,999

Oppo F19
Oppo F19

18,990

Motorola Moto G40 Fusion
Motorola Moto G40 Fusion

13,999

POCO M2 Reloaded
POCO M2 Reloaded

9,499

OPPO A74 5G
OPPO A74 5G

17,990

Oppo A53s 5G
Oppo A53s 5G

14,990

Vivo V21 5G
Vivo V21 5G

29,990

Realme C25
Realme C25

9,499

Realme C21
Realme C21

7,999

Realme C20
Realme C20

6,799

Motorola Moto G60
Motorola Moto G60

17,999

iQOO 7
iQOO 7

31,990

Samsung Galaxy M42 5G
Samsung Galaxy M42 5G

21,999

Xiaomi Mi 11 Ultra
Xiaomi Mi 11 Ultra

69,999

Xiaomi Mi 11X Pro 5G
Xiaomi Mi 11X Pro 5G

39,999

Xiaomi Mi 11X
Xiaomi Mi 11X

29,999

Realme 8 5G
Realme 8 5G

13,999

Samsung Galaxy F02s
Samsung Galaxy F02s

8,999

Samsung Galaxy F12
Samsung Galaxy F12

10,999

POCO X3 Pro
POCO X3 Pro

18,999

Realme 8 Pro
Realme 8 Pro

17,999

Realme 8
Realme 8

14,999

Vivo X60 Pro Plus
Vivo X60 Pro Plus

69,990

Vivo X60 Pro
Vivo X60 Pro

49,990

Vivo X60
Vivo X60

37,990

OnePlus 9 Pro 5G
OnePlus 9 Pro 5G

64,999

OnePlus 9R 5G
OnePlus 9R 5G

39,999

OnePlus 9 5G
OnePlus 9 5G

49,999

Samsung Galaxy A72
Samsung Galaxy A72

34,999

Samsung Galaxy A52
Samsung Galaxy A52

26,499

Micromax In 1
Micromax In 1

10,499

Asus ROG Phone 5
Asus ROG Phone 5

49,999

Samsung Galaxy M12
Samsung Galaxy M12

10,999

Motorola Moto G30
Motorola Moto G30

10,999

Motorola Moto G10 Power
Motorola Moto G10 Power

9,999

Oppo F19 Pro Plus 5G
Oppo F19 Pro Plus 5G

25,990

Oppo F19 Pro
Oppo F19 Pro

21,490

Xiaomi Redmi Note 10 Pro Max
Xiaomi Redmi Note 10 Pro Max

18,999

Xiaomi Redmi Note 10 Pro
Xiaomi Redmi Note 10 Pro

15,999

Xiaomi Redmi Note 10
Xiaomi Redmi Note 10

11,999

Realme Narzo 30A
Realme Narzo 30A

8,999

Realme Narzo 30 Pro
Realme Narzo 30 Pro

16,999

Infinix Smart 5
Infinix Smart 5

7,199

Samsung Galaxy F62
Samsung Galaxy F62

23,999

Samsung Galaxy A12
Samsung Galaxy A12

12,999

Nokia 5.4
Nokia 5.4

13,999

Nokia 3.4
Nokia 3.4

11,999

Realme X7 Pro 5G
Realme X7 Pro 5G

29,999

Realme X7
Realme X7

19,999

Vivo Y31
Vivo Y31

16,490

Oppo Reno5 Pro 5G
Oppo Reno5 Pro 5G

35,990

Samsung Galaxy S21 Ultra 5G
Samsung Galaxy S21 Ultra 5G

1,05,999

Samsung Galaxy S21 Plus 5G
Samsung Galaxy S21 Plus 5G

81,999

Samsung Galaxy S21 5G
Samsung Galaxy S21 5G

69,999

Vivo Y12s
Vivo Y12s

9,990

Vivo Y51A
Vivo Y51A

17,990

Samsung Galaxy M02s
Samsung Galaxy M02s

8,999

Xiaomi Mi 10i
Xiaomi Mi 10i

21,999

Oppo A15s
Oppo A15s

11,490

Tecno Spark 6 Go
Tecno Spark 6 Go

8,499

Vivo V20 2021
Vivo V20 2021

24,990

Vivo Y20A
Vivo Y20A

11,490

Xiaomi Redmi 9 Power
Xiaomi Redmi 9 Power

11,999

Motorola Moto G9 Power
Motorola Moto G9 Power

11,999

Motorola Moto G 5G
Motorola Moto G 5G

20,999

Vivo V20 Pro
Vivo V20 Pro

29,990

Xiaomi Mi 10T
Xiaomi Mi 10T

35,999

Xiaomi Redmi 9i
Xiaomi Redmi 9i

8,299

Xiaomi Mi 10T Pro
Xiaomi Mi 10T Pro

39,999

Infinix Hot 10
Infinix Hot 10

9,999

Vivo V20 SE
Vivo V20 SE

20,990

Vivo V20
Vivo V20

24,990

Micromax In 1b
Micromax In 1b

6,999

Best Sellers