Industry says Walmart-Flipkart deal a win-win situation for all

Global retail giant Walmart announced on May 9 that it was buying 77 percent of online retailer Flipkart for USD 16 billion, as it makes a splash in India’s exploding e-commerce market.

The massive deal has attracted mixed reactions about the possible impact of the deal on the country's growth as well as the challenges and opportunities that Walmart could encounter ahead.

Also read — Walmart buys 77% of Flipkart for $16 bn; global retail giant to bring in fresh equity of $2 bn

A majority of the industry believes the Walmart-Flipkart deal is a win-win situation for India's e-commerce sector as the market would go on to become more competitive.

"The US retailer's entry may open opportunities for the Indian retailer to become partners and attract foreign investments as the rivals would look to pump up their investments to stay at par with Flipkart and Walmart. Either ways, the Indian consumer seems to be the winner of this game," Gurcharan Das said in an interview to CNBC TV18.

Also Read: Why Walmart is investing in a loss-making Flipkart

"This is actually a fantastic deal because its pretty much good for everybody. Walmart's link with Flipkart has changed great deal of equation for the company and its investors," Saurav Srivastav, Indian Angel Network told the channel and added that the move will open opportunities for Walmart to experiment in a big market.

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Walmart aims to transform India's e-commerce market and the deal is likely to bring India closer to modernising kirana stores and delivery of fresh goods from the farm to the market, Mohandas Pai, Chairman of Manipal Global Education, said.

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Stating that India is one of the most attractive retail markets in the world, given its size and growth rate, Walmart CEO Doug McMillon said the company aims to transform India's e-commerce space. However, this may take time, Ajay Dua said.

Dua hinted at the possibility of opposition from Indian retailers as well as brick-and-mortar firms that may pressurize the government to interfere.

In terms of challenges, Walmart may have to incur huge logistics costs to connect villages across India to supply fresh farm goods, integrate online and retail markets and work on strategies to collaborate with Indian retailers. The government's intervention may further add to the firm's challenges in the way ahead.

Overall, industry experts believe that it is a win-win situation for everyone including consumers, investors, Flipkart and Walmart. "It is a big win for the consumer. Of course, there will be challenges but the investors are happy," Shanti Mohan, founder of LetsVenture, said.