$250 billion worth Walmart, the largest retailer in the world and also the world’s largest private employer has acquired Flipkart officially by paying $16 billion. Now, Walmart owns 77% controlling stake in the eCommerce portal, which is considered as the largest eCommerce deal to have happened till date, anywhere in the world.
There is no doubt that it is the largest ever acquisition in India.
Shareholders of Walmart in the US believe that Walmart has offered too much, in return for too little, by paying $16 billion for a site that a few years ago sold books online, and their founders used to deliver books on a scooter.
Starting May 9th, 2018, when this deal was officially announced, Indian eCommerce sector will be now onwards known by two definitions: Era prior to May 9th and Era after May 9th.
Here are few reasons why:
Changes in Indian Startup Ecosystem
The startup ecosystem in India has got a new hope with this recent mega-acquisition of Flipkart by Walmart.
To begin with, the eCommerce industry has not got a jolt of energy, as the battle for sovereignty is now between Walmart & Amazon. Paytm with the support of Alibaba has the possibility to become the wildcard and unsettle the equations.
On top of all this, Google has also chipped in with $1.5 billion for the purpose of controlling 7% stake in new Flipkart, powered by Walmart, which in turn will result in so many changes for the whole eco-system.
When popular players with huge pockets make an entry to the ecosystem, then all enjoy benefits-modern, cutting-edge technologies are invented, larger deals are finalized and money starts seeping into the system.
Just think about it one Amzon inspired Sachin & Binny to start Flipkart and recreate History-What all can now happen when Walmart will fight with Amazon for controlling the eCommerce industry in India?
Since eCommerce as grown roots in India over the last five to six years or so, this merge indicates the enormous potential of the sector to Indian economy. Rising consumption and the growing economy of India has attracted large numbers of foreign companies over these years. It is now the eCommerce that is creating the biggest waves and altering the fabric of retail industry. The eCommerce industry has shown the power that is associated with a strongly integrated value chain.
It is of no surprise that not only the logistics, packaging and warehousing industries are flourishing, but are increasingly becoming pretty organized, merchandised while retaining its capability to hire unskilled and skilled labors.
From a strategic point of view, Walmart will use the Flipkart connection to turn its current B2Bstores in India to retail business opportunities online and various warehouse locations for product delivery. Ecommerce currently makes up less than 4% of retail market in India, but it is gassed that the number will change as the number of Indians using smartphones are increasing rapidly.
Concluding, we can safely say that this sale of Flipkart is a commencement of a new era in the Indian market. It needs to be find out whether this new era will result in a better tomorrow for India or not. We all can hope for the best!
With the boom in eCommerce industry in India, if you are still running your store in a traditional way of marketing then, its high time to make a shift. In this digital age, it is hard not to afford an eCommerce store. Daily more and more customers are purchasing products online and it has been found as per a study that eCommerce is growing every year by 23 percent. Now, that’s a growth rate that all businesses would be interested in.
It is not like only business owners are benefitted from an eCommerce store, but also the consumers. By having an eCommerce store and a website, you are actually assisting them with their online research and at the same time making it simple for them to buy from you. Take your business online with us.Discuss your ideas with us and we will help you establish your business in the eCommerce industry.
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