Walmart and Amazon are in fierce competition. It’s a battle between the virtual e-commerce giant and the brick-and-mortar titan. Both retailers have been biting into each other’s spheres. First Walmart bought Jet.com to compete with Amazon’s solely online presence. Amazon retaliated by acquiring Whole Foods to compete with Walmart’s lead in the groceries industry. Both companies are working their way into each others spheres little by little and showing no signs of stopping. Amazon is working to open more Amazon Go outlets as Walmart figures out its e-commerce strategy. The next step is to take the competition globally, where Walmart has not fared nearly as well as the online seller. Amazon vs Walmart, who’s buying India’s Flipkart?
What is Flipkart?
Flipkart is India’s leader in e-commerce. It sells everything from electronics to books. Basically, it’s India’s version of Amazon and it is growing fast. Started by ex-Amazon.com employees, Sachin Bansal and Binny Bansal, the tech-start up is certainly making waves. They sell 30 million different products across 70 different categories. It has become known for it’s cash-on-delivery feature and Flipkart First which is the first of its kind in the country. Flipkart First is a membership offering free shipping without a minimum. It also has same day delivery and discounted same say delivery.
Amazon and Flipkart have been head to head in India for quite some time. Flipkart had a start of about five years until Amazon entered the market. Since then they have been competing through investments and are neck and neck. Flipkart owns 44% of the India ecommerce market, making it a major competitor for Amazon trying to gain a foothold in India. So far Flipkart has the edge, considering most consumers seem to trust it over Amazon.
Amazon and Walmart have been back and forth fighting to dominate the online grocery sphere. As said before, Amazon acquired Whole Foods to combat Walmart’s exclusive dominion. Walmart has teamed up with Postmates to ensure fast, affordable deliveries that will reach more customers. But so too has Amazon, offering grocery pick up options at its Whole Foods locations.
If Walmart were to acquire Flipkart, this would mean it would have a physical presence that it otherwise doesn’t have. Walmart is not a direct competitor, unlike Amazon, meaning Flipkart prefers it having a larger share to help compete. Furthermore, Walmart doesn’t have a presence in India like Amazon. Gaining a stake in Flipkart would be used to build infrastructure for food retailing.
Meanwhile, Amazon already has government approval to sell food both online and offline. If it were to gain a stake in Flipkart, it could use their service Supermart to sell groceries to consumers. The grocery industry in India is growing rapidly and could prove to be the market that finally helps achieve the top spot as India’s largest e-commerce business.
The Flipkart acquisition would mean gaining a foothold in the rapidly growing Indian e-commerce market. For Walmart it would mean being another step in its competition with Amazon. Walmart also wants to have a larger worldwide grocery distribution and this would be the perfect chance to gain that. On the other hand, if Amazon were to take the stake, which is unlikely due to Flipkart’s rivalry, it would increase its already successful business in the Indian market. Acquiring Flipkart for Walmart could be an upset, as the retailer has shown it’s capability to be a real threat on Amazon’s e-commerce dominance. The likelihood is that the Amazon-Walmart rivalry is going to continue, and become global. It certainly sounds as if Walmart has almost sealed the deal.