Flipkart-Walmart Deal: What It Means for the Indian Consumer

Does the Walmart-Flipkart deal mean consumers can expect better prices online?

Flipkart and Walmart officially announced the deal on Wednesday, 9 May.

(Photo: The Quint/Rahul Gupta)

Most people are discussing the business side of Walmart’s acquisition of Flipkart, which was confirmed on Wednesday, 9 May. But what about the consumers? After all, this deal is taking place because consumers have been pushing online retailers to serving up the best deals.

Amazon, flush with big money from Jeff Bezos, will battle against the revamped Flipkart, which will be spearheaded by Walmart, one of biggest retail brands in the US.

What does all this mean for the buyers? What is their takeaway from this deal? Does this mean low-priced products on online platforms? Analysts have mixed opinions on this, but initials signs are encouraging.

What Walmart Offers to Buyers

For regular customers, who’ve slowly become attuned to the online shopping arena, they can expect low-price deals. How low? That’s hard to tell right now, but analysts we spoke to believe Walmart is sure to bring some level of pricing competition.

Having said that, Flipkart is most certain to enter the grocery segment in the country, aided by Walmart’s expertise in the space.

Indian consumers will get new product types, which otherwise were not available online before. Both brands will bring in global stocks and sellers to the local marketplace, giving more options to the buyer.

One of the many outcomes of the intense competition between these brands will be investment in newer categories like grocery and furniture, among others.

Sanchit Vir Gogia, chief analyst, founder & CEO, Greyhound Research

Grocery has been a big miss for Flipkart, and Gogia, along with other analysts, believe this would be Flipkart’s next go-to segment. Flipkart already leads the online smartphone retail market in India.

According to a Counterpoint report, the online smartphone shipments in 2017 grew 23 percent, while Flipkart and Amazon’s share grew by 43 and 33 percent respectively.

Flipkart rules the online smartphone sales space. (Photo Courtesy: Counterpoint Research)

Flipkart has no credible stand in the grocery space, and Walmart will surely look to change that by going up against Amazon and other names like BigBasket.

Better Delivery and Products Guaranteed

If analysts are to believed, the days of ordering an iPhone and getting bricks delivered could become passe. The reason? Better backend logistics at most online shopping brands in the country, and Walmart will have a bigger and deeper role to play in that.

Consumers will get better-managed deliveries given the increase in investment in supply chain and infrastructure. This will also translate to the availability of products in Kirana stores, which implies better pricing, quicker deliveries, and overall better service levels.

Sanchit Vir Gogia

Analysts understand the change in the market dynamics both Walmart and Amazon with their deep pockets will bring, something that Flipkart couldn’t manage on its own for long.

Can buyers expect better deals after this?

One analyst, who spoke anonymously to The Quint, said “Walmart is globally known for its low-priced products, and in India, their deep interaction with retailers, without involving the middlemen, could results in prices that are attractive without burdening anyone’s pocket.”

Amazon and Flipkart will battle it out with Walmart behind the scenes. (Photo: The Quint)

He added that until now, most of the online shopping brands were run as technology companies. That mindset is definitely bound to change, with Walmart focusing its strategy from a retailers point of view.

Walmart’s history in India, with wholesale stores and its online expertise, doesn’t paint a rosy picture, but industry experts are focused more on what they have done in the offline space. “Walmart has made big money in the traditional retail sector, and that expertise, combined with Flipkart’s online presence, can work its charm, meaning win-win for buyers,” says the analyst.

Analysts reckon it’s better to wait and watch how Walmart decides to function once the deal crosses the finishing line by the end of 2018.

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