Amazon gears up for a battle against Walmart

After Walmart acquired a controlling stake of 77% from India’s online retailer Flipkart, it’s neck-to-neck competitor, Amazon, has made its next move. It is being speculated that the e-commerce giant is seeking a stake in the Indian conglomerate, Future Group making it evident that the company is looking forward to establishing a physical presence as strong as its virtual one. With Walmart having failed to succeed with any of its incepted 21 stores, analysts are dubious about its prospects in India.

Will Walmart’s Flipkart acquisition give it a competitive advantage or will Amazon’s latest decision sustain it ahead?

India as the new battleground

There has been a long-known rivalry for a position in the future of the retail market in the United States of America where Walmart is a venerable chain of discount stores and Amazon, the king of E-commerce.

Walmart has a really strong hold on the markets of the US. The American retail giant, however, chose to expand into India through the Bangalore-based company Flipkart who is also in a drag-out clash with Amazon for the Indian market. Walmart’s first initiatives to become a trusted brick-and-mortar retail chain in India failed. There continues to be a strict regulation of Foreign Direct Investment (FDI) in this country. So, this newer strategy is seen as an exploitation of the growing online presence of today’s customers. Flipkart, as a firm, is registered in Singapore but currently has a sturdy ground in the Indian sectors of online fashion and electronics. An extensive analysis would thus elucidate the thought process behind Walmart’s Flipkart acquisition. These two companies have now teamed up against Amazon with a bigger money at disposal now.

Given this situation, would Amazon’s investment in the Future group give a boost to its firepower?

The potential impact of Amazon’s investment in Future Group

Renowned business analysts claimed from a detailed market research that Walmart’s 200 billion-dollar investment in Flipkart could be a futile effort from the perspective of this competition. This is because they believe that the latter will continue to remain the face of the business and will also further benefit from the advanced infrastructure that the former is capable of providing it with.

Amazon has stepped into physical retail to fend off Walmart’s entry to India. Its multichannel approach will surely benefit it in the competition although the investment in Future Retail’s e-commerce will not directly lead to a great monetary influx. Amazon will be capable of expanding its consumer base by entering the grocery segment through Future Group. Future group will in turn benefit from Amazon’s existing consumer base and sourcing operations.

Are there any short-term benefits?

The clash between the retail titans has no end in sight. The immediate benefits land in the homes of the consumer. Not only will the market have more choices than ever, many of these will also not become more accessible and affordable. At this point, there is no specific basis to claim which company will more likely edge the other one out, but it is a common opinion that most small players and start-ups will be wiped away.