Finally, it’s confirmed, it’s FlipkMart and not Flipazon or Flipbaba! For the last couple of years, there have been speculations of Flipkart takeover by either of Amazon, Walmart or Alibaba. Almost everyone thought Alibaba was going to take over Flipkart because of the Softbank connection and the fact that Alibaba has been quite interested in the Indian e-Commerce space. Then, it was Amazon, a company valued at over $700 Billion that’s been trying to capture the whole of Indian e-commerce market. It made a lot of sense for Amazon to acquire it’s biggest and resilient competitor, Flipkart. But finally, it was Walmart, a surprise entry that stole the deal. Walmart has been trying to compete with Amazon in the online commerce space in the US but hasn’t really been able to challenge Amazon’s online dominance. By acquiring Flipkart, Walmart has become Amazon’s biggest competitor in the rapidly growing Indian e-commerce space. So, it’s the USA vs the USA on the Indian soil, when it comes to e-Commerce. Following are the 10 potential consequences of this deal for Indian e-commerce users and the Indian e-commerce market.
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- Price wars will continue: Had Amazon been successful in acquiring Flipkart, it would have meant an end to crazy discounts that we’ve got used to over the last 3-4 years. It would have certainly been a monopoly. But with Walmart stealing the deal, we could see a completely new phase of e-commerce wars in India. Both Walmart and Amazon can’t afford to lose this battle, and they have plenty of ammunition to take it to a whole new level. So, we can expect a lot of discounts, better customer service and American innovation in the Indian e-commerce market in the near future.
- Don’t count Alibaba out just yet: Alibaba could join this battle. It could possibly drive a PayTM-Snapdeal merger and acquire PayTM’s e-Commerce business. That’d be quite interesting. It’s really difficult for PayTM to thrive, both on Payments and e-commerce fronts. On Payments front, WhatsApp and Facebook are coming up with really powerful solutions, and on the e-commerce front, you got Walmart and Amazon. So, PayTM suddenly finds itself competing with the US giants on all fronts. Alibaba could come to its rescue sooner or later. This is probably Alibaba’s only chance to enter the Indian market.
- Indian economy will get a boost: Amazon and Walmart are going to pump in a lot of cash in their attempt to win this battle. This means the customers will be able to buy more things with the same amount of money, ultimately benefiting SMBs/SMEs who will create more jobs and contribute more to the economy. GST collection too will get a boost.
- Start-up funding boom 2.0: This is one of the first success stories, a great exit for Flipkart’s investors and stakeholders. There had been a lot of criticism about big funding rounds for e-Commerce companies, with every expert predicting Flipkart’s doom! Finally, cynics have been proven wrong. Flipkart exit would mean a lot of free cash coming back into the system and a lot of new millionaires. The renewed confidence in the Indian start-up story and free cash would mean a lot of new investments in Indian start-ups.
- More variety of goods: With two big US players fighting for market share, we can expect lot of new products and a lot of variety to be available to the Indian consumers in the near future.
Overall, it’s a great win for Indian consumers and India’s start-up story.
Bonus: Here’s what’s believed to have been presentation used during the Walmart-Flipkart acquistion discussions. Click here to download (pdf): Walmart-Flipkart Investor Relations Presentation – May 9, 2018