The whopping US $16-billion mega deal by global retail giant Walmart with the country’s leading e-tailer Flipkart for majority stake makes India an attractive destination for global majors in the digital space, industry experts said on Wednesday.
Kishore Biyani, CEO, Future Group
“I think nothing changes, only the ownership has changed. The model is still the same. It’s just an event. It is the change of hands from one foreign investor to other foreign investor; from a financial investor to a strategic investor.”
Sanjay Sethi, Co-founder & CEO, ShopClues
“Flipkart team has done an awesome job in bringing the world’s largest retailer to India. This is also a great endorsement of the large opportunity that Indian market presents as well as the mettle of the Indian entrepreneur. It also proves that there is a lot of money to be made in the Indian startup ecosystem.”
Vijay Shekhar Sharma, Founder, Paytm
“This is Rs 1 lakh crore all cash deal which is a perfect answer to those who were dismissive of Indian start-ups in an open-for-all market.”
Kumar Rajagopalan, CEO, Retailers Association of India
“As representatives of the entire retail industry, it is RAI’s policy to not comment on any deals between individual companies. Having said that, we would like to affirm our support to both online and offline channels of retail as well as Indian and International retail. We believe that some e-commerce companies in India have not been adhering to the guidelines issued under the Press Note 3 of the FDI Policy for marketplaces. These companies have been directly or indirectly participating in pricing and discounting, which is against the policy that seeks to create a level playing field. We hope that while the government takes positive steps promote retail, it also takes strong steps to ensure adherence to FDI policy.”
Ajay Srinivasan, Research Director, Crisil
“The deal indicates the attractiveness of India’s consumption market for global majors. With Walmart acquiring stake in Flipkart, we expect enhanced thrust on the online grocery segment. We expect online grocery to be the fastest growing segment in the e-retail space, growing at a 65-70 percent CAGR to touch Rs 100 billion in revenues by fiscal 2020.”
Adrian Lee, Director, Gartner
“We expect the status quo to remain within the year after the mega deal. It’s an extension of the US $500-billion Walmart’s global expansion strategy. We expect the competition getting aggressive as Amazon counter-offered Walmart for a stake in Flipkart. Both have cash reserves and the outcome in the Indian sub-continent will determine the access to its growing middle-class consumers for dominance, outside the US. User choice should be improved with more Walmart labels differentiating the merchandise. Flipkart will diversify its inventory to attract more Indian consumer segments that haven’t started shopping online. With a huge user base, India looms as an attractive market for retailers. It’s estimated that 15 percent (200 million) consumers will shop online by this year-end. The deal will also benefit homegrown firms, as consumers are attuned and comfortable to shopping online with e-commerce marketplaces. As e-commerce penetration remains low (15 per cent), we expect discounts and promotions to continue.”
DS Rawat, Secretary General, Assocham
“Walmart-Flipkart (deal) as a salute to the success of an Indian Start-Up that pioneered the fledgling online retailing in a country where bulk of the trade is in the unorganised sector. Isn’t it so great that a start up goes on to fetch an enterprise valuation of about $21 billion, making the Walmart equity infusion as the largest ever FDI into India.”
(WITH INPUTS FROM IANS and PTI)
