Retail Battlezone

With e-commerce poised for exponential growth in India, the country is fast emerging as the new battleground for global retail giants. Can local players withstand the onslaught?

- Ajita Shashidhar

THE TWO AMERICAN retail giants have fought pitched, bruising battles on their home turf, and in markets around the globe. Walmart, the world’s largest retailer, and Amazon, the e-commerce behemoth, have crossed swords once more, this time in the fastest growing major economy, India.

Jeff Bezos-owned Amazon, with its smart technology-backed consumer solutions, has always had the upper hand. It has left Walmart little choice but to join the digital bandwagon to grow. In the last couple of years, Walmart has made a bevy of online acquisitions across the world, from Jet. com in the US to JD.com in China. The most recent is, of course, the $16 billion (₹1.07 lakh crore) investment in Indian online retail major Flipkart – its costliest acquisition so far. Despite these expensive investments, 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.

Amazon has outwitted Walmart in almost all the markets the two have competed in. In the UK, Walmart had invested in Asda, a supermarket chain, and business was kind of chugging along until Amazon tied up with grocery retail company Morrison and started delivering grocery at the doorsteps of consumers. Walmart sold Asda to Sainsbury last year for $10.1 billion, keeping a 42 per cent stake for itself. Similarly, in Japan, Walmart had acquired retail chain Seiyu and was struggling to make a success of its proprietary EDLP (Everyday Low Pricing) model. When Amazon entered the market in 2017, Walmart hurriedly tied up with online retailer Rakuten to provide online grocery delivery. In China, Walmart didn’t have to fight it out with Amazon but had to be happy playing second fiddle to market leader Alibaba which has an 80 per cent share of the retail market in the country.