Time to revise the Indian Retail Predictions for 2018-2021

Time to revise the Indian Retail Predictions for 2018-2021

With the Walmart-Flipkart deal signed, it is evident that all the predictions made for Indian Retail market for next 3 years need revision.

You may have already read about Walmart buying Flipkart, which is not just a large multinational buying a startup but two large multinational's amalgamating for capturing larger market share in India [Walmart Brings Amazon Fight to India]. We have been seeing in past 2-3 years Amazon and Flipkart locking horns and heavily investing in cut-throat promotions and with this deal, this pace is only going to increase over the next 24 months as also highlighted elsewhere in media [The Walmart-Flipkart deal is unlikely to make Amazon back down in India].

With Flipkart being ranked number one in fashion, number one in large appliances and number two in electronics, Walmart can leverage this to their advantage and create more promotions in these categories to build a larger customer base. This on the other hand is likely to build pressure amongst brands like Amazon or brick-n-mortar chains operating in the same space with supply chain inefficiencies. We can also anticipate that Paytm, where Alibaba has a major stake, is likely going to make some major acquisition to defend its recent investment in Paytm Malls. Similarly, Snapdeal that has been struggling for some time now will need to drive going back to the roots more aggressively [Infibeam Acquires Snapdeal's Unicommerce for Rs 120 Cr] or plan for acquisition. Independent of how this pans out, at least in the near term, the net benefiter of these would be the end consumers.

Another segment of the industry that can expect to see repercussion of this is Supply chain and procurement considering Walmart to be an expert in this space with global procurement strategies already in place. Alibaba similarly has been leveraging its Chinese roots to bring economical products to Indian market. While these and the Government's "Make in India" push plays together is yet to be seen.

The US$17 Billion investment is a very strategic move of Walmart as per the media spread.[Jim Cramer: Disney, Walmart Stock Gets Whacked for Investing in the Future] And the Indian e-commerce market that the two companies are fighting for is forecasted to be much bigger than that of China according to Porter Erisman, author of Six Billion Shoppers (New York: St. Martin's Press, 2017).

Conclusion: With this acquisition we can anticipate lot more consolidation to happen in next 12-18 months to not only change the e-commerce market in India but the Indian Retail in general and the only retailers who are going to come out stronger are the ones that invest heavily in technology now.

About Author :

Ed Khatuka

Ed has over 25 years of experience in strategy, marketing, product and business management and has rich expertise on growth strategy, organization design, new product launches and global operations. He is currently the CEO of Intellect Commerce Limited.

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