Flipkart Pvt Ltd.

is an Indian electronic commerce company

based in Bengaluru, India. Flipkart founded by Sachin & Binny
bansal in 2007, the company initially focused on book sales, before
expanding into other product categories such as consumer
electronics, fashion, and lifestyle products. As of March 2017,
Flipkart held a 39.5% market share of India's e-commerce industry.
Flipkart is significantly dominant in the sale of apparel and was
described as being "neck and neck" with Amazon in the sale of
electronics and mobile phones. Flipkart also owns PhonePe,
a mobile payments service based on the Unified Payments
Interface (UPI).

Walmart Inc. is an American multinational retail corporation that

operates a chain of hypermarkets, discount department stores,
and grocery stores. The company was founded by Sam Walton in
1962 and incorporated on October 31, 1969. As of January 31,
2019, Walmart has 11,348 stores and clubs in 27 countries,
operating under 55 different names. Walmart’s global
organizational size gives the business deep pockets to fund growth
and expansion. Walmart’s supply chain has high efficiency
because of advanced technologies for monitoring and controlling
the movement of products from suppliers to its stores.

COLLABORATION OF FLIPKART AND WALMART

In August 2018, U.S.-based retail chain Walmart acquired a 77%
controlling stake in Flipkart for US$16 billion, valuing it at $22
billion. For Flipkart, this is a strategic sellout while for Walmart,
this is a long-awaited entry into retail in India, after succeeding in
other Asian markets like China and Japan. After having
established itself as the world’s largest retailer, Walmart wants to
bite a chunk of the Indian retail market worth $670 billion. Holding
Flipkart’s hands, Walmart will surely expand the ecommerce
market in India. Of course, there is the undeniable effect of
Amazon, the only company which has posed a strong rivalry
to Walmart in the US and Flipkart in India. But this new alliance
does more than fight Amazon, which has got 35 percent market
share in India in five years. Flipkart has a lot to learn from
Walmart in terms of work culture and operations, while Walmart –
being the veteran that it is can take a leaf or two out of Flipkart’s
book in innovation.
Flipkart’s extravagance and Walmart’s frugality

Walmart’s key is to offering low prices to the customers. In fact,

their Every-Day-Low-Pricing (EDLP) strategy is a result of efficient
methods in sourcing, supply chain, and front-end operations. While
Flipkart likes its luxuries, be it swanky offices or pay packages to
fresh graduates. In India, the next 100 million customers to come
online will be the middle class, who check price labels before
buying and Flipkart will definitely benefit greatly by following
conservative minded Walmart’s dictum.

Flipkart’s advantage in operations

The Walmart deal will give Flipkart access to international markets.
To penetrate deeper into different markets the homegrown
ecommerce unicorn will need deep pockets like Amazon – exactly
what Walmart brings in. To build loyalty among customers, they
need to shift focus to beauty, grocery, personal care items,
furniture, etc. on which Walmart can do a lot. Currently Flipkart has
no expertise for running offline. But Walmart is already offline and
can open physical retail in India with Flipkart brand stores in the
long term.
What Walmart gains from Flipkart
For Walmart, it is a move into another large market. With the
Flipkart deal, Walmart is in a position to get on a higher ground as
they have a stake in the biggest ecommerce company in India. It
never has had an online presence and it knows that to take on
Amazon it has to get a strong online presence. Walmart is slow
paced, and needs new generation leaders like Flipkart, which
encourages entrepreneurial culture, to boost their online
presence in India. Flipkart tech and service are efficient and they
are a powerful business while Walmart does not have direct retail
experience in India.