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E-commerce » E-tailing » Amazon Flipkart walmart Ecommerce Deal

How Amazon missed three


opportunities to acquire Flipkart
With Walmart expected to focus strongly, Amazon India will now have to devote
more attention to its food-retailing and grocery businesses.
Mugdha Variyar | ET Bureau | May 10, 2018, 08:40 IST

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BENGALURU: When Amazon began operations in India in appointment
and said
2013, it decided it needed to be aggressive and not repeat Samara Capital in talks that
to buy …
the mistakes it made in China. The online commerce giant Jaimini

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Amazon: How Amazon missed three opportunities to acquire Flipkart, Retail News, ET Retail 5/25/18, 10)24 AM

also realised its global playbook that had served it well in Subway outlet shut after consu…
developed markets such as Germany and Japan would not
L Catterton invests in Future Lif…
work in India.
Private equities to buy Vishal M…

“We are not afraid to do things differently or do things


completely new, even if we don’t have existing models Most Read in E-commerce
elsewhere,”
Home NewsAmazon India head Amit
IndustrySpeak Jobs &Agarwal
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interview in December. “We call it being cowboys.”
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scale of the world’s
Apparel & Fashion largest
E-commerce online retailer while
Food & Entertainment remaining
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“nimble like a startup.” Yet, it hasn’t been able to move fast
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enough on acquisitions, which may have held back Amazon
in talks to buy
from quickly wresting market leadership from Flipkart. Aditya Birla
Group's More
for Rs 2,500
crore

SoftBank agrees
to sell Flipkart
stake to
Walmart

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Amazon will ban
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Amazon entered the latest negotiations midway with an


attempt to outbid Walmart by offering a deal valuation of
$22.5 billion for Flipkart. Walmart’s lower bid at a valuation
of about $20 billion triumphed because Flipkart’s board
decided regulatory clearance would be easier for this, as ET
reported on May 2. The Seattle-based online retail giant had
a chance to acquire Flipkart at least twice before. Amazon

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Amazon: How Amazon missed three opportunities to acquire Flipkart, Retail News, ET Retail 5/25/18, 10)24 AM

offered $500-700 million for Flipkart before it launched


operations in India in 2012. It bid again with an $8 billion
offer in 2015.

Both times it lowballed Flipkart’s investors, for whom a sale


to Amazon was exit plan A. Amazon also missed
opportunities to buy India’s largest online grocer BigBasket
and online fashion retailer Jabong. The Jeff Bezos-owned
online retailer may now need to double its investment
commitment to its India operations to $10 billion, say
analysts. “We believe (Amazon’s commitment to India) will
be close to $8-10 billion when all is said and done,” said
Daniel Ives, chief strategy officer at New York-based GBH
Insights. “Breaking into the Indian retail industry is going to
take some time to play out and a massive investment
profile, which we believe is nearterm pain for long-term gain
in this fertile market for Bezos & Co.” Vivek Wadhwa, a
professor at College of Engineering, Carnegie Mellon
University, too, expects Amazon will double its investment in
India.

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Amazon: How Amazon missed three opportunities to acquire Flipkart, Retail News, ET Retail 5/25/18, 10)24 AM

“With Walmart emerging as a real threat in India, I would not


be surprised if Amazon doubled its bets on the Indian
market. It will do whatever it can to own the Indian market,
dumping as much capital as is needed,” Wadhwa said.
Manish Ti- wary, vice president for ca- tegory management
at Amazon India, said the online marketplace remained
aggressive in building infrastructure and adding categories,
sugges ting the company was choosy about closing
acquisitions. “We are at a stage where we can build
internally and provide better service, selection, and value to
the customer,” he said.

With Walmart expected to focus strongly, Amazon India will


now have to devote more attention to its food-retailing and
grocery businesses. Amazon has committed $500 million to
its food-retailing business in India but progress has been
slow so far. The government has asked Amazon not to
share the warehouses of its food-retail business with its
marketplace business, which has delayed by months the
company’s plans to take its food venture nationwide, ET
reported in April. “Our preparation on Amazon Retail Private
(which will sell food products) has nothing to do with the
competitive scenario. Building up the capability to handle
fresh food is a learning process. If you are asking if we are
delayed, it is going as per our plan,” Tiwary said.

Amazon’s deadliest weapon in India is its subscription


service, Prime, with customers using it for anything
including music and movies as well as new products such
as Amazon’s smart speaker, Echo. Prime, which covers 40

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Amazon: How Amazon missed three opportunities to acquire Flipkart, Retail News, ET Retail 5/25/18, 10)24 AM

million products for priority delivery, has about 8-10 million


subscribers in India. While Amazon may have been slow on
acquisitions, it has been active in making investments
across sectors, including in financial marketplace
BankBazaar, gifting platform Qwikcilver, and digital lender
Capital Float. The strategy is to have a presence across
categories, said Sachin Dalal, cofounder of ecommerce firm
Infibeam. “Initial investments help in due diligence and
gathering market intelligence for potential acquisitions later,”
he said.

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Advocate Sarin • 11 days ago


Wallmart Vs Amazon two popular names in US and now
going to be in India, but the truth is even in US where both
hold big market shares people perception is not same.
Wall mart is generally known for poor quality Chinese
products. Their own brand products in Pharma / Health &
personal Care are doing fine but otherwise for quality
items, furniture Electronics etc people go else ware. Now
a days the biggest challenge these people are getting is
from Costco which sells quality products at far better
prices than anyone else. Here in India people prefer stores
and malls and wall mart can do big business if they can
enter that segment too but again that will be huge risky
investment. On other side at moment Flipkart may be
doing more business than Amazon but truth is Amazon is
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Amazon: How Amazon missed three opportunities to acquire Flipkart, Retail News, ET Retail 5/25/18, 10)24 AM

doing more business than Amazon but truth is Amazon is


giving better, faster services and their name is more
acceptable to Indian Consumers. Entry of wall mart in
India with flipkart at such a high price may not provide
them much advantage except entry in to India.
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