Well, it seems the turf war over online retail and distribution in India is reaching a boiling point.
As we reported previously, Amazon has been muscling its way into that market, one of the fastest growing in the world, to the detriment of the local incumbent – Flipkart. In our previous post, we highlighted how India is becoming fertile ground for same-day delivery, considering it’s a relatively new, emerging market.
Walmart Investing $1 Billion in Flipkart
This week, Bloomberg is reporting that Walmart plans to invest $1 billion into the Indian Internet Services company, Flipkart. From a strategic view, this investment makes a lot of sense – especially through the lens of the larger eCommerce battle brewing between “traditional” retailers such as Walmart, and Amazon.
Earlier this year, Amazon made an additional $3 billion investment in its Indian operations, on top of a previous $2 billion investment.
Both Amazon and Walmart making a play for India are part of broader battle within the eCommerce space. We’ve recently seen BestBuy’s stock surge on the uptick in its eCommerce business, which only goes to prove the necessity of “big box” retailers to crawl their way into the eCommerce space – a space so heavily dominated by Amazon.
India is such an important market because other Asian markets, such as China, have been a much harder nut to crack. AliBaba’s solidified position, as well as the difficulties that can be involved in doing business in China, have made that market less desirable.
This move by Walmart would come on the heals of another move that had a clear focus of knocking Amazon off its pedestal – the purchase of Jet.com for over $3 billion, which included keeping the former Amazon-er, Marc Lore.
So what happens now in the Indian market and eCommerce globally?
First, it’s extremely likely that AliBaba will increase its investments in the Indian market, most likely through Snapdeal.com. Second, big retailers back in the US are going to start thinking about how they can expand their eCommerce presence abroad – whether in India or elsewhere. Amazon has dominated the US market, but it might be possible to beat them in markets that haven’t fully matured yet.
Only time will tell, but it sure seems like things are heating up.