There has been lot of hype and hoopla about the walmart-flipkart deal and many have been considering this to be the most crucial point in the history of indian ecommerce. This deal has created the first generation ecommerce billionaires of India (Sachin and Binny Bansal). This is definitely a turning point in the history but is it for good or bad is obviously a point of deep discussion.
There are few things which deal is going to mean and some of them are good for the consumer and some are not:
- There might not be another flipkart in the making in near future: With amazon and walmart going to control almost 90% of the Indian ecommerce, there is rarely any chance of another company coming up in near future. As flipkart did in it’s heydays, it did not allow any company to come upto it’s competition by taking over the reign of those companies and have never given them an opportunity to enjoy the economy of scale. Without the economy of scale no other company is going to compete with the Amazon or Walmart.
- There is going to be monopoly by the two of the biggest retail players in the world: It is really doubtful if any of the indian companies are going to compete with these behemoths, whether its in the brick or mortar segment or in the ecommerce segment. Hence there is going to be monopoly of the market which in the short term may benefit the consumers as there is going to be price reduction, but in the long run there would be price stability and control by these 2 big players.
- What about Make in India? : There has been lot of hype around the make in India initiative in the manufacturing segment. With Walmart and Amazon around many of the make in India products would get the proper platform to reach the different nook and corner of the country. With the proven track record of logistics management, inventory management, digitalization there is going to be a enormous push to the make in India initiative. But even though the manufacturing sector would get a push the services sector might get disheartened with the decreasing scope of sustainability going forward, especially in the ecommerce segment.
- What about the copy cats? : Most of the so called unicorns in India are nothing but the copy cats of US and Chinese established players. Ola has nothing but a copy of Uber and so is true for OYO Room (copy of AirBnB), Flipkart (of Amazon) and many other players. On the other hand China has been ahead of the competition at the world stage by being ahead of US in most of the new ideas in Blockchain, IOT, Quantum Computing etc. So is there a possibility of Indian companies thinking innovative and doing something new rather than just being a replica of it’s western counterparts? Only time will tell this but the chances are very rare.
This deal is undoubtedly a defining moment for India and undoubtedly will bring a lot of changes for the consumers. Only a retrospective analysis would indicate how it translated in larger scheme of things. Let’s keep the fingers crossed till then.