April 28, 2018
Walmart and Alphabet are seen joining forces once again as they seek to take on Amazon’s growing retail clout, this time in a market outside the US.Walmart’s acquisition plan for Flipkart will likely involve Google’s parent Alphabet taking a minority stake in India’s largest ecommerce company.. Alphabet will probably invest $1-2 billion after the Walmart acquisition, expected to be announced shortly.
As part of a partnership forged in the US last year, Walmart products are sold on Google Express, the tech giant’s online mall. Google also offers personalized voice shopping for Walmart products online. Consumers can also place orders for Walmart products by speaking them out to Google Home devices.
Google has been exploring India’s retail market with pop-up outlets in various malls to showcase Pixel smartphones. ET reported earlier this month that Google had drawn up an India-focused strategy to roll out products including smart speakers, premium laptop Pixelbook, and intelligent home automation products and is even planning a midrange smartphone especially for markets such as India.
Walmart wants to gain a stronger presence in India that will be underscored by a commitment to the country’s farm sector that it sees as mutually reinforcing, particularly with regard to the food and grocery segment.
India’s total consumption is expected to rise to $3.6 trillion in 2027 from $1.3 trillion in 2016, according to industry data. The retail market is expected to hit $1.8 trillion from $650 billion in 2016. Of this, the biggest driver is expected to be food and grocery, pegged at $1.1 trillion in 2027 from $420 billion in 2016, which will drive a separate and similarly substantial investment by Walmart in agriculture, the sources said.
This will help build backend supply chain infrastructure that benefits farmers and Job creation would get a big boost directly and indirectly with such an investment in a fast-growing and large consuming economy like India.