A very peculiar development is taking place in the world of e-commerce. Flipkart is a very popular online retailer. The company has now garnered the interest from Walmart, the US retailer. The American company is willing to spend $16bn to buy 77% of the Indian e-commerce player. This move doesn’t bode well for Amazon or other companies vying for a spot in the online shopping industry.
Walmart is going down a very interesting path right now. The company is looking to get a bigger piece of the e-commerce pie. By looking to buy the majority of Flipkart, the American retailer is bringing stiff competition to Amazon. That can only be considered to be a good thing. Less centralization in e-commerce is always a positive development. How this venture will play out, is a different matter altogether.
A Big Gamble by Walmart
It is evident the e-commerce industry still offers a lot of potential. Amazon has taken note of Walmart’s plans and decided to make a counteroffer. They too were interested in acquiring a majority stake in Flipkart. It seems that deal fell through in the end, although no reason was given as to why that is the case. Amazon is not giving up on this business model despite this setback, though.
India will play a big role in the future of e-commerce. It is the most important region now and in the years to come. With no other opportunity coming even close to the same scale, Amazon and Walmart will need to make inroads in one way or another. That is much easier said than done. The deck is stacked against both companies right now.
Even so, it seems Walmart has scored an important first victory in this regard. Whether or not it will be sufficient to win the “war” remains to be seen. Going toe-to-toe with Jeff Bezos and his company is not easy by any means. Additionally, the company has its own main Indian subsidiary. An interesting battle to keep an eye on, that much is rather evident.
Header image courtesy of Shutterstock