Brick And Click

With Flipkart firmly under its control, Walmart is looking for a turnaround in e-commerce.

- Abhinav Singh

THERE HAVE BEEN many versions of the developments that led to the resignation of Binny Bansal as the group CEO of Flipkart, India’s largest e-commerce company which he co-founded 11 years ago. There has been, however, only one consequence—Flipkart is now under the firm control of the American retail giant Walmart, which acquired a majority stake in the company in August.

Flipkart has been in a state of transition ever since Walmart pumped in $16 billion for a 77 per cent stake in the company in an attempt to outsmart Amazon, the world’s largest e-tailer by revenue, in the fast-growing Indian e-commerce sector. “This is akin to conducting a surgery in a moving train,” said Alok Shende of Ascentius Consulting. “Flipkart will be under constant competitive pressure, and under this regime, it will have to deliver robust financial results.” Walmart’s investment in Flipkart was a response to the rapid rise of Amazon in the US. “Amazon doubled its revenue in four years while Walmart saw just a 2 per cent growth during the same period,” said Rajiv M. Ranjan, chairman and managing director of the startup PaisaDukan and a keen observer of the e-commerce space. “Walmart is already paying the price for its late awakening to e-commerce. While Amazon dominates the US e-commerce with a 43.5 per cent market share, Walmart has a nominal presence with just 3.6 per cent.”