For a long time now, there are rumours floating that Walmart and Flipkart are going to join hands, with Walmart seeking to buy stake in Flipkart. The most prominent reason for this possible deal is slowing the business or sales of their common rival Amazon. Though there was and still isn’t any confirmation about this deal, it was speculated that Walmart is planning to buy 15- 20 % stake in Flipkart in the coming year, that is 2018. However, it looks like the strategies of Walmart have changed somewhat because now rumours have it that Walmart now wants to purchase majority stakes in Flipkart.
While the deal with Flipkart would surely provide Walmart entry into the Indian markets, it is apparently not enough according to the plans that Walmart has. There have been reports stating that Walmart wants to establish its roots in India and so have decided to double its investment. Apart from investing in Flipkart, Walmart is going to invest in or acquire Indian tech start-ups. And, though, like mentioned earlier, there are no comments or confirmation about the Walmart-Flipkart deal, Walmart has confirmed about the possible investment in Indian tech start-ups.
In an interview with Livemint, Jeremy King, Walmart’s chief technology officer, confirmed that Walmart will aggressively continue to expand and invest in India. And, the pathway to this expansion is Indian tech start-ups.
Delving a little of on the strategy, King stated that “my focus is really taking some of the same strategy we have from a tech perspective- we’ve acquired 13 companies and we would love to do that here in Bengaluru as well. The last time we were here, we met a bunch of start-ups. My goal is to pick up somewhere between three and five start-ups in the next year or so, because we’ve had a lot of success in the US with that. It never ceases to amaze me to see how many start-ups are getting cranked out from Bengaluru.”
Seeing the past results of King’s strategy, it would be right to assume that Walmart is soon going to be a big part of Indian markets. According to the records, over the past few years, Walmart has been able to advance its e-commerce business by following its strategic investments. The proof of this is the purchase of the US-based online retailer Jet.com for 3.3 billion by Walmart. In the interview, King himself said, “The Jet acquisition was a big moment for the Walmart.com, we got some strong business talent.”
Plus, since Bengaluru is considered to be the hub of Indian techno market, it is surely a step planned by Walmart. However, investing in Indian tech talents is not Walmart’s whole plan. It wants to further deepen its roots in India and so has decided to establish India as its “tech centre” and aims to make Bangalore its “main remote site outside the US.”
Similar to Kin’s point of view, Hari Vasudev, vice president of technology at Walmart, said: “the appetite is very strong.” And, the key to the success of their goal is to find the start-ups who are either “aligned to [our] strategy from product perspective”, or “have very strong talent”.
If everything pans out, undoubtedly Walmart will be able to establish itself in India. However, doing so is not its major or sole aim. Whether anyone at Walmart admits it or not, its main aim in investing in Indian market is to close the gap between itself and its rival Amazon.
One of the recent significant proof of this rivalry is the sudden urge of both companies to push their envelope further with starting online groceries. On behalf of Walmart, King said “We’re spending a huge amount of time and resources on online groceries. The experience is great, it could be even better. We’re growing extremely fast over there,” However, it was Amazon got the upper-hand here. In February, it started its pilot project of food retail venture in India and earned recognition as the first foreign venture to do so.
Also, if we talk about the present status of both in India, everyone would agree that it is undoubtedly Amazon which would win the competition between the two. Therefore, it would be interesting to see how successful Walmart gets in India with all its investment plans and acquisitions. And whether or not it manages to push Amazon of its position in India.