With the recent top management shake-up behind it, Walmart-owned Flipkart will witness a complete makeover, starting with rationalisation of cost structures on every line of expenditure, including cost related to operations, merchandising, supply chain, logistics, people, advertising and even office rentals.

India’s largest e-tailer will go through a process of right-sizing its workforce for continued growth with a focus on building an ecosystem of products, services and partners that will create a level playing field for it to take on rival Amazon over the next two years.

For starters, the next 12 months will see a thorough clean-up of operations at Flipkart by Walmart. “Flipkart has demonstrated very little accountability to its investors so far, with unreasonably high salary payouts at all levels in their urgency to grow market share against Amazon and their mounting losses year-on-year” said an industry observer.

Arvind Singhal, CMD of Technopak Advisors told BusinessLine: “The magnitude of Walmart’s $16 billion investment to acquire majority stake in Flipkart reveals that Walmart is betting big on the future of Indian e-commerce in general and Flipkart in particular over a 15-20 year horizon. It is therefore, only to be expected that Walmart, which has efficiency in its DNA, will bring in incremental changes in Flipkart daily, weekly, monthly and annually, until it achieves efficiencies across functions. The impact of these changes will be seen in the next 12-24 months.” .

At $500 billion in revenues, Walmart is one of the most successful retailers in the world. It has also grown in e-commerce to become the third largest e-commerce retailer in the US, after Amazon and eBay, according to a report by eMarketer.

“Walmart will do everything in its power to conquer India, its last bastion, as it has lost out to Alibaba in China. With its ability to create ‘best prices’ and expertise in sourcing, merchandising, supply chain, logistics etc, Walmart will create a Flipkart that is a worthy competitor to Amazon which enjoys a more favourable position in India with its high trust business including great products, great pricing and even better customer experience, that is second to none” said Rajeev Banduni, CEO of GrowthEnabler Global.

While the Government’s FDI policy in multi-brand retail will not allow Walmart to integrate its 23 Best Price Modern Wholesale stores with Flipkart, Walmart will assist Flipkart to go beyond merchandise assortment and build an e-commerce ecosystem with differentiated offerings for its vast customer base, said Singhal. These will include bundled offerings in financial services, education and entertainment services, all backed by AI-driven customer insights, that customers will lap up, he added.

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