May 22, 2019

Flipkart mulls offline grocery stores in India


Walmart-controlled Flipkart plans opening offline brick-and-mortar grocery stores in India. Food retail is thriving business in India and Flipkart is now on the verge of tapping into it. Flipkart has recently opened its fifth online grocery store in Mumbai. Flipkart has outlets in all major cities and towns in India.

India does not allow global players in the domestic retail market. However, food industry is an exception and Walmart has leveraged its entry in order to make its presence felt. Strategically, food is one of the dominant markets where India has an edge and the country has an advantage in the B2B as well as B2C categories. Local food outlets in India can avail of online routes and extend their products in new market places within the country.

Sources say globally around 50-60% of Walmart’s sales come from food. So this is not a new strategy for Walmart. This strategy in India will boost Walmart’s cash-and-carry business where its revenue has lagged. No business would want to enter a market without a strategy for profit. Walmart has thus leveraged its strategy in its scheme of things in India.

Walmart’s global competitor Amazon is also in the process of investing 500 million dollars in the form of its retail arm, Amazon Retail India. Amazon has a huge stake in Aditya Birla Group’s food and grocery retail chain. It is also acquiring Kishore Biyani’s Future retail which operates Easy Day and Big Bazaar.

Locally, Mukesh Ambani’s Reliance Retail is poised to enter the online retail market in a big way and this will pose the biggest challenge for both Walmart and Amazon. After its successes in its traditional sectors of oil and other industries and its deft entry into the communications sector with Jio, Reliance appears to be veering towards another success in the B2C sector in online retail.

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