The Walmart-Flipkart deal will go down in Indian e-commerce history as the largest of its kind, read a 77% stake worth USD 16 billion. While the industry is gushing over Flipkart co-founders’ business acumen in turning a bookstore into India’s most popular e-commerce platform, the deal also marks Walmart’s graduation to an online store.
However, Walmart might be a household name now, but it actually entered the Indian market a while ago, in 2007. Ever since, slowly but steadily, the retail giant has maintained a low-profile rate of growth and expansion in India. Now, with 21 Cash and Carry stores, Best Price flagship stores, and Kirana programmes, the company is going all in.
Walmart India launched its first fulfilment centre (FC) in Mumbai in November 2017 and recently launched one more in Lucknow. To increase its brand presence in India Walmart has now revealed plans to invest around USD 500 million (INR 3200 Cr), taking the total number of B2B Cash and Carry stores in India to 70 by 2022. In fact, out of their 23 B2B Cash and Carry stores, 19 have attained break even with more than a million members.
Walmart’s Mera Kirana programme, which has been piloted by the company for the past four years, now intends to absorb it into its mainstream business. Walmart India also owns and runs 21 omni-channel Cash and Carry stores under the brand name Best Price Modern Wholesale Stores in nine states pan India. The company recently launched its 23rd wholesale store in Visakhapatnam, and discussions are on for a second store.
As the competition in Indian e-commerce space heats up, what has Amazon been doing? The world’s largest e-commerce store might have lost the deal when Flipkart chose Walmart, but it hasn’t been lagging behind. So far, Amazon has launched 67 fulfilment centres in cities like Bengaluru, Mumbai, Delhi, Vijayawada, and Kolkata, in 13 states of India, covering 20 million cubic feet. This September, Amazon also introduced its website and phone interface in Hindi, with the aim of capturing consumers from India’s hinterland with tier ll and lll cities.
Amazon Crosses the USD 1 Trillion Mark, Launches Hindi Website in India
Recently, Amazon also made its single-highest infusion into its India marketplace by thrusting INR 2,900 crore into Amazon Seller Services. This is Amazon’s third capital thrust into its India business this year, taking its investment total in Amazon Seller Services to INR 17,840 crore (USD 2.6 billion), which is twice that of Amazon rival and Walmart-acquired Flipkart’s INR 8,349 crore investment to the marketplace. This year, Flipkart too raked in almost USD 4 billion (about INR 26,180 crore) in funds.
Logistics being a crucial part of its success, what with its Prime service offering same day delivery, the company is trying to up its e-commerce game by investing USD 16.7 million (INR 122 Cr) in its logistics arm Amazon Transportation Services (ATS). Data from the Registrar of Companies filings for FY18 reveals that Amazon’s logistics arm has been earning almost 60% revenue growth year-on-year.
Competition in logistics comes from Flipkart’s ekart service, which has plans of launching a logistics centre in Kolkata, covering 80 acres, to capture deliveries in the East and the North East. The significance of logistics can be judged from the fact that both Flipkart and Amazon maintain attractive delivery and warehousing staff wages at 25-60% above the minimum wage required in India.
