Walmart to enter e-commerce segment in India?
According to reports, Walmart's e-marketplace business model is similar to US-based Amazon and eBay Inc.
India’s e-commerce segment is set to receive a major boost from Walmart. According to reports, Walmart is working on an e-marketplace business model similar to US-based Amazon and eBay Inc to foray into in e-retailing in India.
Citing sources privy to Walmart’s plans, an Economic Times report says a team of about 15-17 people, headed by Walmart India’s COO Arvind Mediratta and global veteran and V-P for operations Steve Rodrigues, is readying a model, which is likely to be rolled out in next three to four months. Walmart hasn’t yet finalised the brand name for its new Indian e-commerce site.
“The project has been on for seven to eight months and has gathered pace in the past four to five months,” says a person with direct knowledge of the situation. “It will be the Amazon and eBay business model.”
It’s worth pointing out here India does not allow the foreign retailers to sell wares directly online to customers. Amazon and eBay both have a marketplace model, which gives platform to third party vendors and gets commissions in return.
According to the report, Walmart will adopt a ‘cleaner’ and safer method for its e-commerce venture in India. Walmart hasn’t officially confirmed the report, but given an ambiguous statement.
“Our experiences worldwide support the fact that ecommerce is an important and growing area that meets our customers’ shopping needs. Toward this, we encourage the government of India to consider opening ecommerce for FDI,” ET quotes a Walmart India spokesperson as saying.
It’s notable Walmart has run into a spate of controversies in the past. Back in 2012, Walmart was accused of being engaged in bribery over access to the Indian market. It was alleged Walmart spent about $25 million in lobbying fees to get laws loosened up on foreign direct investment in the retail industry.
E-commerce segment, however, could be a good opportunity for Walmart and its India plans. India’s e-commerce segment is still in its nascent age with only few dominant players such as Flipkart, Snapdeal, Amazon and eBay.
Walmart and Amazon have already sought the Indian government to open the online retail market for foreign investment, like the supermarket sector has been opened to foreign players.