The recent Google investment of $350 million in Walmart-owned Flipkart, reportedly, comes at a time when the e-commerce major is aiming to enter the quick commerce battle in India. The investment increased Flipkart's valuation to around $36 billion. Along with expanding its business and Cloud collaboration, the investment will also help Flipkart boost its digital infrastructure for better customer service.
Experts point out that Walmart's investment in Flipkart signals a significant shift for India's e-commerce industry and the workforce. With this investment, the other players and the ecosystem will attract further investments and it is expected to see enhanced digital adoption and initiatives from other e-commerce players too.
“We will see progress on the deployment of new technologies such as IoT, robotics, augmented reality, blockchain etc. At the same time, the industry is likely to work on ESG practices more to redefine the benchmarks,” said Aditya Narayan Mishra, MD and CEO of CIEL HR.
It is expected that Walmart's expertise in supply chain management and logistics is not only going to bring benefits to Flipkart and its consumers but the Indian e-commerce market is expected to challenge itself and push the limits to innovate further.
“The competitiveness is likely to rise further. Ultimately, it's a win-win for the consumers and at the same time, a boon for the entire workforce who will work under greater challenges and learn to innovate further. The expansion of supply chains and new commercial opportunities will drive job creation, directly employing thousands of more people across functions in the industry,” added Mishra.
Google’s investment in Flipkart can yield benefits to both organisations as Flipkart’s valuation and prospects are expected to rise with its entry into the quick commerce segment as well.
“There is a need for large amounts of capital to upgrade infrastructure and leverage opportunities thrown up by Artificial Intelligence. The competitive intensity is likely to go up with Zomato, Reliance, Amazon, Zepto, Swiggy and Tata Digital all vying for more market share. This also aligns with Google’s capital deployment plans in India, this can pave the way for the rollout of Google platforms and services, as part of Flipkart’s infrastructure modernisation program. On the face of it, it looks like a win-win deal. The execution of the partnership is the key,” said Jeevan J. Arakal, Professor and chairperson – Branding and PR, at T.A. Pai Management Institute (TAPMI) at Manipal.
Flipkart has been contemplating its entry into quick commerce in the near future. It aims to tap the customers in a multidimensional approach with the changing market dynamics. The company has also diversified by entering new categories such as travel through the acquisition of Cleartrip, e-pharmacy with Flipkart Health Plus, at-home services and so on.
The investment is a step in the right direction and is bound to change the e-commerce landscape in the country. “The duo of Amazon and Flipkart has established a strong duopoly in India. In the short to medium term, this appears to be stable. However, within the broader tech landscape, there are still strategic opportunities that can benefit Flipkart-led platforms. Additionally, Google's involvement in Flipkart's growth ensures the continued use of Google's cloud services, thereby expanding opportunities for Google,” remarked Alok Shende of Mumbai-based Ascentius Consulting.