Walmart Will Acquire A Dozen Indian Startups, But Flipkart’s Cash Burn Of Rs 70,000 Crore Under Walmart Is Not A Good Sign
India is going digital in every way possible and taking advantage of the massive market of India are online e-commerce platforms, who have turned into huge industries competing with one another.
The Indian market is dominated by two e-commerce giants: Amazon India and Walmart-owned Flipkart, who are constantly going at it and trying to one-up each other.
Walmart, in another such attempt to be one step ahead of Amazon’s India chapter, is planning to acquire as much as 12 startups in India! On the other hand, Walmart-owned Flipkart has burned a massive $1 billion.
What do Walmarts’ two big developments signify? Read on to know our opinion on Walmart’s actions!
Walmart Planning to Acquire Twelve Startups
Walmart is looking to invest in not one, not two but 8-10 startups in India, and these startups are all in their initial stages.
As per reports, all these startups specialise in ‘areas of deep tech, platform-as-a-service, social networking, retail technology’. The names of any of these startups have not been revealed as of yet.
These startups will assist Walmarts plans of developing more products and Walmart will no doubt attract a huge pool of talent, which is found the most in such startups who haven’t crossed many milestones in their journey.
Flipkart Cash Burn
Ever since Flipkart has been taken over by Walmart, the Indian e-commerce platform has burnt a whopping $1 billion or Rs 70,000 crore cash, as shown by regulatory filings.
Walmart revealed that up until April 30, Flipkart has $1.2 billion in cash and cash equivalent in its books, which will be used for running operations in Flipkart.
Flipkart’s parent company also said, “approximately $1.2 billion can only be accessed through dividends or intercompany financing arrangements subject to approval of the Flipkart minority shareholders.”
Is Walmart trying too hard to beat Amazon India?
It is clear that Walmart has chosen the easy way out by buying already set startups, instead of trying their own luck. There is confirmed news that Walmart has invested a huge amount of money, within the range of $100k-200k to acquire these startups.
That Walmart is buying multiple startups to boost developments, and allowing so much cash burn at Flipkart are two reasons which make it seem that Walmart is trying a bit too hard to outdo Amazon India at e-commerce.
Ever since their launch, Walmart has been forced to change a lot of features on its platform to be at par, if not above, with Amazon India. The competition between them will probably never fizzle out, but we consumers are the ones who will profit from this.