Amid Flipkart Stake Acquisition Rumours, Walmart India Admits to Digital Influence Rising on Consumers
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At a time when media reports are simmering with news of Walmart Inc picking up a majority stake in India’s biggest ecommerce company Flipkart, Entrepreneur India met up with Walmart’s India CEO to know more about the company’s India strategy.
In an exclusive conversation Krish Iyer, who has been Walmart India's CEO since January 2015, said he was not in a position to comment on consolidation between different players in the market but outlined that the company’s focus continues to be on its flagship cash and carry business named Best Price.
“There is no room for consolidation when it comes to cash and carry primarily because our basic purpose is to serve small kirana stores. So, smaller the better and we really want to encourage the small kirana stores, offices, institutions or hotels, restaurants and caterers to grow and to purchase the products from us,” Iyer told Entrepreneur India.
In a report published on Reuters, sources familiar to the matter said Walmart Inc could seal a deal to buy a more than 51 per cent stake in Flipkart as early as next week.
Walmart is the largest retailer in the world but has not been as successful in the online retail space compared to its arch rival Amazon Inc. In India, Flipkart follows a B2C (buyer to consumer) model in the form of an online marketplace, Flipkart also allows sellers to sell their products on the online platform.
Iyer told Entrepreneur India that as far as Walmart’s experience with its customers or members is concerned, digital influence is certainly much more prevalent.
“With digital influence, I mean consumers checking the prices of the products or features of the products before coming to the store, and buying it - that is certainly far more prevalent,” Iyer said.
He clarified that as Walmart operates mostly in Tier 2 and Tier 3 cities at this point in time, most of its sales currently, that are actual physical transactions, are taking place in the stores but the digital influence is quiet high.
According to Reuters, Walmart has been in talks with Flipkart for months to acquire controlling stake as it looks to take on rival Amazon.com Inc head-on in India, a market where ecommerce is tipped to grow to $200 billion in a decade.
Iyer, however, dismissed any competition from digital players in the space.
“When I say digital influence, it’s not about competition with digital players itself. Rather it means consumers going to other websites and checking what the prices of various products are; this is something that the customer is willing to do on the internet. They are then making the trip to the store to buy the product,” Iyer said.
He reiterated Walmart’s plan to open 50 more stores in a timeframe of 4 to 5 years. “Currently, we have 21 stores and we are on track to open more stores as announced earlier,” Iyer said.
Online retail market in India has grown at 26.4 percent last year compared to 39 percent in 2016 and more than 100 percent in 2014 and 2015 according to online retail forecast report by Forrester.