A day after US retail giant Walmart struck its largest deal with Indian e-commerce company Flipkart, there has been prevailing fear among small traders and farmers that deal could potentially wipe off their business. Although the details & metrics of the deal is yet to be made public but as a first reaction, the Confederation of All India Traders (CAIT) said that it is certain that the Walmart-Flipkart deal is nothing but in long run a clear attempt to control & dominate the much potential retail trade of India by Walmart through e-commerce which is only a bridge to reach out to offline retail market of India. So, is this threat real? Let’s try to find out.
Speaking on same, Baqar Naqvi, Business Director, Wazir Advisors said, “I think it may harm the organized retailers, both online and offline, more than the unorganized retailers as this will create an organized ecosystem with the advantage of being “distributed” and close to the customer. While consumers are increasingly adopting the online channel for food & grocery and this will further the pace, given the push that Walmart will create, but the market is also growing. So in all, I don’t see anything negative for unorganized retailers.”
Will employment get boost??
"This deal to me suggests that more jobs at bottom of the pyramid, higher engagement with the sellers, better growth rate of MSME, increased CSAT and higher Shareholder value in time to come"- Rohit Vashisht- Chief Business Officer- Integrated Media Logics
Speaking on same Naqvi said, “Yes it will. Walmart will have to create a robust backend and support system to manage retail and will need to invest in the supply chain, creating jobs.”
Validation for Indian Start-ups
“Flipkart team has done an awesome job in bringing the world’s largest retailer to India. This is also a great endorsement of the large opportunity that Indian market presents as well as the mettle of the Indian entrepreneur. It also proves that there is a lot of money to be made in the Indian startup ecosystem,” said Sanjay Sethi, Co-founder & CEO, ShopClues.
The deal is indeed a validation of the fact that the Indian consumer market is on top of the list of all large global companies and they are eager to have a foot in the door, whatever it takes. Indian startups who have been able to create a niche for themselves could be the vehicles of entry for some of these players.
“I think it would be wrong to say Indian companies are failing to go global. I think there is so much to do in the domestic market, given its size, growth, and evolution that most companies are able to satiate their appetite without going global. Indian consumer market is one of the fastest growing in the world and hence presents a huge opportunity, luring global players to come in,” said Baqar.
It is certainly not an end for Indian e-commerce. There might be further acquisitions as Walmart worldwide is known as an offline retailer.” I think with the current regulatory framework, multi-brand offline retail will not be a possibility, at least in the near future. But given Walmart’s strengths, it will very actively push offline retail the moment the market opens up. Some of the large players in the market could be the targets. Also, from a different perspective, Amazon could also look at a physical play to counter Walmart/ Flipkart in the Indian market. This space will only get extremely exciting to watch out for,” concluded Baqar.