ET Now Debate: Stage set for Walmart-Amazon clash

The stage is set for a big showdown between Walmart and Amazon in India. The world’s biggest retail giant, Walmart, is expected to sign a deal to buy India’s number one ecommerce player, Flipkart, for an eye-popping valuation of $20 billion early next week. The deal comes despite the best efforts by the Jeff Bezos-owned Amazon, which had even offered a $2-billion breakup fee to Flipkart to keep Walmart away.

The deal, once sealed, will give a back-door entry into India for Walmart, which has been looking to set up shop here for years now. Interestingly, the Flipkart acquisition will also mark Walmart’s global debut in the fast-growing ecommerce space.

What makes Flipkart attractive for MNCs like Walmart and Amazon?


Analysts say it is hard for international retail giants to ignore the Indian online market, which is expected to clock volumes of $200 billion by 2026. One thing is for sure, it is coming of age for the desi startups, although critics say it is a classic case of nervous Indian entrepreneurs throwing in the towel a bit too early. On the positive side, the $20-billion valuation for Flipkart is a toast to Indian entrepreneurship.

On ET NOW’s India Development Debate, startup experts and serial entrepreneurs discussed the one-of-its-kind Walmart-Flipkart deal. Here are some key takeaways:

Haresh Chawla Partner, True North
It is great news for Flipkart’s founders and its current investors. A big thumbs-up for the company that they have built. Walmart needs to make a move into the Indian market and they have been struggling for years. How these bets play out is a different matter altogether. Flipkart has so far withstood Amazon’s onslaught. Amazon will double down when they see Walmart stepping in. This battle will consume many more billions of dollars.

Saurabh Srivastava, Chairman & Cofounder, IAN
The Indian market isn’t quite where it needs to be for this kind of investment, but there is no other market with this kind of potential. The battleground has to be India. Walmart is looking at India as a big state. Yes, they may be overpricing a bit, but we will know if it is worth the money only a few years down the line.

K Ganesh, Serial Entrepreneur
It is a positive development for VC-funded new-age companies across sectors. The question earlier was, ‘Can Indian companies justify the high-capital infusion?’ It is also acall for action for traditional companies. If they don’t do something new, they will get wiped out. We have already seen this happening in the US. Large conglomerates need to get their act together. They said ecommerce won’t work in India. All of that has to stop now.

Bipin Preet Singh, Founder, Mobikwik
It is a bit of a misnomer when you call it a ‘winner takes it all’ market. Whether it is telecom or banking, no industry has seen the winner walking away with all the goodies, and the same holds true for internet-enabled services. It has been a long-drawn battle in India for Walmart and it is a pretty good move. With the kind of capital it has, Walmart will give tough competition to Amazon. It will be interesting to see how Alibaba reacts, because you have two big players in the market already.

R Jagannathan, Editorial Director, Swarajya Magazine
This is a very strong signal that the Indian technology-related businesses are gradually opening up. This is a huge incentive for startups to plug into new ventures which are attracting billions of dollars. The worrying point is that there is going to be no big Indian player at the top of the pile; you will only have minnows striving to survive in an ecosystem that is being created by the Googles, the Amazons and the Alibabas of the world. What we will not have is a giant Indian technology company.