How walmart is getting ready for a bruising battle with amazon in india? Walmart-Flipkart deal Walmart in India Walmart's competition

1. How Walmart is getting ready for a bruising battle
with Amazon in India
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2. GROUP MEMBERS GROUP NO:
1. Vanshika Garg - PGP22232
2. Kumar Mrigank - PGP22103
3. Avantika Pathak - PGP22052
4. Shailja Sati - PGP22187
5. Arpit Pachauri - PGP22046
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3. TABLE OF CONTENTS
TOPICS PAGE NO.
1. Walmart…………………………………………………………………………………4
2. Flipkart………………………………………………………………………………….5
3. Case Summary……………………………………………………………………….6
4. Why did Walmart acquire Flipkart…………………………………………8
5. Objectives……………………………………………………………………………..9
6. SWOT Analysis………………………………………………………………….10-14
7. PEST Analysis…………………………………………………………………….15-19
8. Pros and Cons of Walmart-Flipkart Deal……………………….…20-23
9. Competitive Analysis…………………………………………………………….24
10. Porter’s five forces Analysis………………………………………………….28
11. Strategies……………………………………………………………………………….34
12. Conclusion………………………………………………………………………………36
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4. Walmart
Walmart Inc. is an American multinational retail corporation headquartered
in Bentonville, Arkansas.
Doug McMillon is President and CEO of Walmart Inc.
It operates a chain of hypermarkets, discount department stores, and
grocery stores.
The company was founded by Sam Walton in 1962 and was incorporated on
October 31, 1969.
Bharti-Walmart's first store came up in India in the city of Amritsar in 2009.
Walmart has 21 Best Price Wholesale stores in India.
Krish Iyer is the President and CEO of Walmart India.
Walmart acquired Flipkart in 2018 (9th Novemeber) for USD 16 billion.
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5. Flipkart
Flipkart is an Indian e-commerce company based in Bangalore,
Karnataka, India.
It was founded by Sachin Bansal and Binny Bansal in 2007.
The company initially focused on book sales, before expanding into
other product categories
Flipkart holds a 35% market share of India's e-commerce industry
Flipkart also owns PhonePe, Myntra, Jabong.com, Ekart
Flipkart Group CEO Kalyan Krishnamurthy.
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6. Case Summary
Flipkart Walmart deal has changed the landscape of Indian Retail
Sector.
Walmart has acquired 77% of the total shares of Flipkart for USD 16
billion.
Walmart wanted to penetrate in the Indian retail market as it is the 5th
largest retail market in the world which is growing at 12% per year.
World’s largest e-commerce deal.
Regulations barring FDI in multibrand retail and a failed partnership
with Bharti have restricted Walmart India to cash and carry wholesale
only.
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7. A strategic investment in or an acquisition of Flipkart would be
Walmart’s response to the rapid rise of Amazon.
Walmart is paying the price for its late awakening in e-commerce.
Amazon dominates the US e-commerce whereas Walmart has a
nominal presence.
Ecommerce still remains a very small portion of the Indian retail
industry.
Beginning of a capital-intensive battle between two US giants on the
Indian soil.
Walmart’s previous partnerships with Jet.com and JD.com.
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8. Why did Walmart acquire Flipkart
Lucrative Indian Market.
Can grow with the help of Flipkart’s 175 million registered user base.
Backdoor Entry into Indian market to have slice of retail sector.
Give competition to Amazon India.
Create Brand Image in India.
Use PhonePay to grow online business by using online payment platform.
Pool of Technology and Talent in Flipkart.
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9. Objectives of Walmart in India
Expansion of wholesale cash and carry business.
Create online presence in Indian market.
Give a tight competition to Amazon in e-commerce to curb its monopoly
in India.
Dominate Indian market by having 360 degree presence here (both
offline as well as online).
Tap potential Indian market which is the 5th largest retail sector in the
world which is to grow at the rate of 12% .
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10. SWOT ANALYSIS
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11. Strengths
Through Flipkart, Walmart got a category leadership in
India with a majority stake in e-commerce sector.
Prior e-commerce experience.
World’s largest retail company by revenue.
Everyday low price strategy.
Huge infrastructure and supply chain(procurement,
sourcing IT, supply chain and vendor network).
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12. Weaknesses
Walmart is just rushing to the competition against
Amazon.
No success beyond America.
Late awakening in e-commerce.
Tarnishing corporate reputation.
Lack of genuinity of the products.
Less customer satisfaction.
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13. Opportunities
Adding premium quality product.
Expansion of wholesale stores in India.
Improve health and diet products.
Improve user interface.
Walmart-Flipkart can highlight major regional festivals
and culture.
Expand reach across the country.
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14. Threats
Competition from various market players, Eg: Big Bazaar,
Pantaloons, D-mart, Reliance Retail Ltd., etc.
Unexpected returns.
Continuous innovation by Amazon may lead to shift of
customers from Flipkart to Amazon.
Change in FDI policy or new e-commerce policy.
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15. PEST ANALYSIS
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16. Political factors
100% FDI allowed in e-commerce sector in India.
Barring FDI in multi-brand retail in India.
The new FDI policy bars maintaining stock of 25% or
more of their inventory from a single vendor.
No more deep discounts to customers.
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17. Economic Factors
Growing economy.
Employment opportunities.
Revenue gain from taxes will be added to domestic
revenue receipts.
This deal brings with it the much needed capital
investment in the Indian economy.
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18. socio-cultural factors
Cultural diversity (stereotype for online shopping).
General tendency of consumer behaviour – window
shopping.
India is a young country with average age of 29 yrs.
Walmart can increase its variety of products satisfying
various cultures of India.
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19. Technological factors
Flipkart’s talent, customer insights and innovative culture will benefit
Walmart across the globe.
Walmart International is bigger than Boeing, Facebook, Coca-Cola and
Alphabet in total sales and technology is Flipkart’s strongest points. So
Flipkart was the only way Walmart could have survived Amazon’s
rivalry.
Flipkart’s technology and experience in running an e-commerce is
something Walmart doesn’t have.
With the introduction of 4G technology in India , digital marketing
started growing at a rate of 25-30%.
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20. PROS OF THE WALMART- FLIPKART DEAL
BENEFITS FOR WALMART
Walmart is known for its culture of innovation and service. This can help in scaling
up Walmart’s business scale in India which can generate more revenue and create
technological spill-overs.
This deal can spur their online presence in Indian markets.
Walmart got all the subsidiaries of Flipkart in entire $16 billion.
Competition to Amazon in e-commerce.
Getting to tap potential Indian retail market. It’ll use Flipkart’s consumer base to
build its brand image in India.
Partnering with kirana stores will help Walmart to create its offline retail
presence in India.
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21. BENEFITS FOR FLIPKART
Now with Walmart India's cash-and-carry business Best Price, Flipkart
will have a 360 degree advantage. It already had a 200 million online
user base. It now gets the user base of retailers.
Good deal for Flipkart's other investors.
Flipkart was going in losses, it was about to die. Walmart acquired
Flipkart and therefore its valuation went up to $20 billion.
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22. BENEFITS TO THE ECONOMY
Consumer will get low price and more variety.
As the world’s largest retail giant pours funds, it will lead to more
such investments in e-commerce.
Economic growth.
Job creation.
Modernization of Indian retail practices.
A lot of innovation can be seen by small players.
Restraining monopoly in country.
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23. CONS OF THE WALMART- FLIPKART DEAL
Giant setback for smaller players.
Foreign company’s dominance in Indian e-commerce.
Flipkart’s negative image.
Small Players will be hurt by this as market spaces shrink due to cut
throat competition which force small firms to exit.
Money flow will go out of the country.
Big Data Mining.
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24. COMPETITIVE ANALYSIS
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Strong vs. Weak
competitors
Close vs. Distant
competitors
Good vs. Bad
competitors
Strong Weak Close Distant Good Bad
Amazon Shopclues Amazon Quikr Amazon JioMart
Future
Group
Ebay Big
Bazaar
Olx

25. Who are Walmart-Flipkart’s competitors?
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In E-commerce:
Amazon
Snapdeal
Paytm Mall
Shopclues
Ebay
Other Vertical e-commerce
companies
Olx
Quikr
In Offline Retail:
Future Group
Reliance Retail
D-Mart
Mom-&-Pops stores
Other MNC entrants(Costco, Tesco)

26. Three variables while analyzing competition
Share of market: Flipkart
Share of mind: Flipkart is the first name that comes to our mind
as far as e-commerce is concerned.
Share of heart: Amazon is the company from which we prefer to
buy.
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27. Influence of Market Position on Strategy
Market Leader : Flipkart
Market Challengers & Followers : Amazon, Snapdeal,
Paytm mall, Shopclues, Ebay, Tata Cliq
Market Nichers : Indiamart, Regional e-commerce
firms(Sargam), Vertical e-commerce companies(Grofers,
SouledStore).
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28. Porter’s Five Forces Analysis
A Porter’s five forces analysis of Flipkart shows the
implications of the competitive rivalry or intensity of
competition on the business and e-commerce. This
condition of the industry environment pushes the company
to explore strategic measures to manage the negative
effects of competition. Walmart led Flipkart is in a
continuous process of improvement to counteract the
impact of strong competition.
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29. Competitive Rivalry or Competition
(Strong)
Large firms in the e-commerce market. (Amazon, Paytm
mall, Snapdeal, Ebay) (strong force)
Large variety of horizontal and vertical e-commerce firms.
(strong force)
High aggressiveness in e-commerce market. (strong force)
Strong competition among existing firms. (strong force)
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30. Bargaining Power of Buyers (Weak)
Large population of consumers. (weak force)
High diversity of consumers. (weak force)
Small size of individual purchases. (weak force)
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31. Bargaining Power of Suppliers (Weak)
Large population of suppliers and vendors. (weak
force)
Tough competition among suppliers. (weak force)
High availability of supply. (weak force)
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32. Threat of Substitutes or Substitution
(Strong)
High availability of substitutes. (strong force)
High variety of substitutes. (strong force)
Lower costs and better services by substitutes.
(strong force)
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33. Threat of New Entrants or New Entry
(Strong)
Moderate to high cost of brand development. (moderate force)
Low cost of doing e-commerce business. (strong force)
Moderate capital costs. (strong force)
Threat of new entrants in online and offline retail industry,
Aditya Birla group, JioMart, Trent Hypermarket Ltd. (strong
force)
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34. Strategies
Tapping rural market and penetrating into them.
Strengthening of vendor base and improved logistics.
Walmart India launched “Flipkart Wholesale”, a new digital
marketplace designed to transform the kirana retail
ecosystem in the economy.
It aims to double down on investments in its e-commerce
business.
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35. Introduction of cash and carry outlets for wholesalers.
It has started converting some of its wholesale cash and
carry stores in India into fulfilment centres.
Win-Play-Show.
Price leadership.
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36. CONCLUSION
With increasing competition in this small part of e-commerce in a vast expanse
of retail industry of India, two US giants Walmart and Amazon are on the onset
of head-to-head capital-intensive battle.
Walmart had made an expensive purchase and the returns are also quite
uncertain as the e-commerce industry had already been suffering substantial
loses before its arrival in India. Walmart is paying the price for its late arrival.
Devising robust marketing strategies to increase its customer reach, expanding
its range across the country by strengthening its logistics, and improving the
quality of its offerings can help Walmart to get an edge over the competition.
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37. THANK YOU
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