Impact of Walmart-Flipkart Deal on India.

It's official. Walmart has wrapped up Flipkart acquisition for $16 billion, a valuation of over $20 billion, which makes it the world's biggest ecommerce deal. Walmart will own around 77% of the Bengaluru-based company in what is also being seen as the largest buyout for the US firm. 

The deal, which will see founder Sachin Bansal exit completely, will now pit US-based giants Walmart and Amazon in the Indian market. 

Online sellers nervous 

Online sellers on Flipkart are jittery because Walmart can wipe them off. Walmart, a $500 billion American behemoth, has a reputation of killing small businesses with ultra-low prices. They fear that Walmart might bring in its own private labels via Flipkart to the Indian consumers, adding to competitive pressures. "These products would be brought in at hyper-competitive prices, which will cannibalise the market and make it difficult for other sellers  .. Told TOI

Walmart has for years tried to enter India but has remained confined to a 'cash-and-carry' wholesale business amid tough restrictions on foreign investment. It currently operates 21 such stores in India. 
Flipkart is being positioned as the arrowhead for Walmart to have another crack at the Indian market, four years after it broke its joint venture with Bharti for a cash-and-carry business. This time around, Walmart’s choice in India is starkly different. While Flipkart has absorbed billions  .. 

Amazon closely trails Flipkart, which along with its fashion units controls nearly 40 per cent of India's online retail market, according to estimates by researcher Forrester. Walmart's push into e-commerce comes as Amazon has embraced offline retail, with an affiliate of the Seattle-based company picking up a $27.6 million stake in Indian retailer Shopper's Stop Ltd. 
War between an empowered Flipkart and Amazon will shrink the space for smaller players because it will ensure that prices

The battle between Amazon and Flipkart for leadership in the Indian market will grow more intense with Walmart buying into Flipkart. Amazon has committed investments to the tune of $5 billion for its operations in India. In a recent investor call, Amazon CFO Brian Olsavsky said the company would continue to invest in India as it saw great progress with both sellers and customers here. 
The war between Flipkart and Amazon will not only create a vast infrastructure of supply chain but also a l .. 

Low prices, more variety 

The American giant Walmart, with huge experience in a first-world economy, will revolutionise Indian retail with low prices and a vast variety of consumer goods. Amazon's fight-back will ensure that prices remain competitive. 

Source:- economicstimes

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