India – The Next Big Battle Ground For Walmart And Amazon

Billions were spent by the US based global retailing giant Walmart to set foot in the Indian retailing market with acquisition of the largest Indian retailer Flipkart earlier this year which pit it directly against largest e-retailer in the world Amazon.com in the fastest growing retail market in the world.

To counter that threat to its already hard fought battle in the Indian market to gain supremacy, Amazon is now preparing to going offline. The company is hoping that this move would help it to acquire the millions of Indian customers that it has not been able to tap so far.

According to a number of reports that were published in the local media, 49 per cent of the Indian grocery and supermarket chain More would be taken over by the e-commerce giant. Indian private equity firm Samara Capital will own the rest of the remaining 51 per cent of the company.

More owns and operated more than 540 supermarkets and hypermarkets throughout India. This retail it is a part of a larger retail business that was owned by the one of the largest Indian conglomerate the Aditya Birla Group and was recently sold off to a company called Witzig.

Amazon and Samara have “agreed to co-invest” in Witzig, said a spokesperson of Amazon to the media but did not provide any details on the amount of investment that Amazon is putting in the company.

The acquisition of More and the 51 per cent stake in the company was confirmed by Paurush Roy, director at Witzig. He however made no comments about any investment or involvement of Amazon.

“We are confident that through More, we will be able to address customer needs for choicest of grocery and food items across the country,” Roy said.

Last year, Indian fashion retailer Shoppers Stop saw a small investment being made by Amazon against a small stake in the brand. However, the first major investment that is being made by Amazon in the Indian market is with More, which is also its first major step into the brick and mortar retailing market in India,

Analysts expect that this move by Amazon would further intensify the rivalry between the e-retailer and Walmart in the Indian market to gain a strong hold over the market with over a billion customers.

The Flipkart deal in May this year was valued at $16 billion under which Walmart has taken up a 77 per cent stake in the company.

It has been a long time that the Arkansas-based retailer had been attempting to enter the Indian market but had been restricted by the ban on direct foreign investment in multi brand retain\ling in India. That regulation was recently relaxed allowing the firm to set foot in the Indian market.

According to Morgan Stanley, the Indian e-commerce market is estimated to be worth $200 billion by 2026 and the acquisition of Flipkart gives Walmart direct and instant access ot hath market.

(Adapted from Money.CNN.com)

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Categories: Economy & Finance, Regulations & Legal, Strategy, Sustainability, Uncategorized

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