India is a massive market for e-commerce business

Cabinet okays 51% FDI in multi-brand, 100% in single brand retail, with this it will create a level playing field. Hope, this decision will be cheered by global retail giants such as Wal-Mart that have long been eyeing India's lucrative retail sector worth an estimated $450 billion a year.

The two American retail giants have fought in India market like one foreign investor sold the stake to other foreign investor to invite the globe competition and it is like the battle unfolding among global tech players in India. The real case study and the test bed is Indian market where about 220 million on-line users with 1 billion mobile phone market and it is increasing post Modi regim, talking most about digital India, it has helped the global company Walmart, the world's largest retailer, and Amazon, the e-commerce behemoth to venturing into India market, where as Amazon has invested billions of dollar in India market, with the entry of Walmart ,they are also going invest few more billion dollars in India to grow the multibrand retail industry, which is sunrise industry, where the online retail is just 3% of total about business in india, it can grow definitely to grow into double digit in this fastest growing major economy, India. It is absolutely true that, India is a massive market for e-commerce business and there is promising opportunity for the world’s biggest retailers to invest.

The fight got so intensive among Walmart and Amazon through Flipkart as the intermediary, Jeff Bezos-owned Amazon, who is into smart technology-backed consumer solutions, and Marc Lore is the third-largest individual shareholder of Walmart, with 3.37 million shares as of March 2018. Walmart was not enough success in their home ground market US and the most recent in China. The most recent is $16 billion (Rs1.07 lakh crore) investment in Indian online retail major Flipkart - its costliest acquisition so far. Sachin bansal exists with 1 bilion dollar, Binny still continuous with the new entity in Walmart. Walmart has consistently struggled to make its e-commerce strategy a success. In 2017/18, Walmart's net income dipped to $10.5 billion (from $14.2 billion). Amazon's, on the contrary, grew by 28 per cent in 2017. With this we can say, Indian entrepreneur is exposed to global capital.

A big question mark is on how India has got benefitted from this in terms of Taxation and employment generation, it is a highly debatable topic as there is no direct investment has come to India, since Flipkart company has registered in Singapore Stock Exchange. The reason for doing that is Flipkart is a loss making company, it doesn’t make profit. As per Indian regulations, a loss making company cannot get listed. Hence, Flipkart took the Singapore route for getting listed. Flipkart is being funded by Tiger Global Management and Accel Partner who are based out of Singapore and it’s really not a Indian company even though the owners are from India. A report says, India should help Flipkart and e-commerce related companies to survive in India, It is absolutely a loss to India.

When we see the competition among Amazon and Walmart at the global level, Amazon has outwitted Walmart in almost all the markets including UK, Japan and China. In the UK, Walmart had invested in Asda, a supermarket chain, and where as Amazon entered by tying up with Morrison (A grocery retail company) by delivering grocery at the doorsteps of consumers. When the competition stiffs Walmart has to sold Asda to Sainsbury last year for $10.1 billion, keeping a 42 per cent stake for itself. In the case of Japan, Walmart had acquired retail chain Seiyu with the module of EDLP (Everyday Low Pricing) model, then Amazon entered the market in 2017, Walmart tied up with Rakuten( on-line retailer) to provide online grocery delivery. Whereas, in China, Walmart didn't have to fight it out with Amazon and failed to crack the China market due to stiff competition from home-grown Alibaba. In 2016, it sold its online retail business Yihoadian in China to JD.com for 5% stake in that company, which is closely associate with Tencent, the gaming and messaging company that is an arch-foe of Alibaba. Alibaba has already invested in Flipkart? Now the interesting part is Tencent, which is challenging Alibaba’s once-dominant position in payments with its own offering associated with WeChat, which Tencent owns. For its part, Alibaba is an investor in Indian payments company Snapdeal and Paytm.

Absolutely there is no doubt on the market share and perception on Amazon, which has a clear upper hand in India in compare to Flipkart. Now an obvious question comes on weather Flipkart is B 2 B or B2C company. If you see the market share, while Flipkart's gross merchandise value (GMV) is at Rs. 48,750 crore, which includes Rs14,300 crore, of Myntra and Jabong , whereas Amazon's is at $5 billion (Rs32,500 crore). Going forward, Flipkart and Walmart will create India's leading e-commerce platform. Flipkart will leverage Walmart's omni-channel retail expertise, grocery and general supply-chain knowledge and financial strength, while Walmart will benefit from Flipkart's talent, technology, customer insights and agile and innovative culture. Hope Walmart must have learnt lessons from the operation in Brazil and UK markets after failure, Walmart is now changing its strategy to enter foreign markets by preferring to enter foreign markets in partnership with a local player rather than try to crack them on its own.

Online retail is growing at nearly 45% in India though the current share of online retail is 3% of the total retail sector in the country. As Google is said to be investing alongside Walmart, that makes perfect sense if you consider the battle between Google and Amazon. India offers Walmart huge incremental potential in online retail with the help of Google’s on-line capability. Each will enter into privacy of the customers by understanding in depth of shopper needs, Google through search ads and Amazon through its own retail platform. With the presence of Walmart and Amazon, battle it out for control of the growing Indian market. This has serious implications for both online and offline retail in India.

The broader roadmap could be to increase the no. of online retailers in India to the next 100-150 million shoppers in Tier-2 and Tier-3 towns, which will require new business strategies. I am sure, technology is bringing disruptions across businesses. Retail is not isolated from the impact of technology. Retailers will have to leverage technology advancements to enhance value proposition and create competitive advantage. As we can see the growth of e-commerce companies in India, with this there will be the growth of the physical stores. Amazon has already picked up 5 per cent stake in Shoppers Stop. Amazon is coming up with experience centres are going to come up at Shoppers Stop stores for the touch and feel the products too. Now a big question comes on who is going to win and lose in India market.

A question comes on weather this business is legal vs ethical. Both Amazon and Walmart are determined to conquer online grocery retail in India, and to do so they are talking about partnering with kirana stores. The consumers would get a joy ride in the short run with the global biggies trying to lure them with attractive discounts, but in the long run it is the Indian companies will have an edge, as they understand the complexities of the market. Cabinet okays 51% FDI in multi-brand, 100% in single brand retail, with this it will create a level playing field. Hope, this decision will be cheered by global retail giants such as Wal-Mart that have long been eyeing India's lucrative retail sector worth an estimated $450 billion a year.