Walmart's Acquisition of Flipkart: Impact on Indian Retail Market and FDI Regulations

The main motive behind this essay is to analyze the largest online retailer in India- Walmart and
strategies by which it has bought Flipkart. When it comes to the marketing strategies, the first thing that comes
in mind is the retail markets as it plays a very important role. Markets help to ensure that all the products and
services belong to different countries are properly exchanged and because of this people belong to different
countries can become aware about the products available in different part of the world. Now as per enhanced
technology, there is an era of e- commerce websites that enables consumers to get knowledge about different
types of products as well as they can easily buy them. It enables foreign marker to start their business and sell
their products to Indian customers (Taguchi, 2011).
Now situation has been changed and there is a high competition begin between Indian and foreign markets. Recently
Walmart (An American e-commerce organization) has took over Indian e- commerce company Flipkart. Now
Walmart has a full control on the operations of Flipkart and it plays a very important role in Indian economy
because it is considered as very profitable for the Indian markets. Now India can also become a big global retailer in
future (Syrett and Devine, 2013).
The main motive behind this essay is to provide information about India as a global market retailer in the
world. It also reflects the interest of Walmart in India and the reason being taken over of Flipkart. It also shows
the reasons of Walmart to abide by different social norms and thinking in Indian society and ensure that they
can be a market leader in Indian market. Retail market are the markets that are involve in the selling of
products to the target audience. Customers fulfill their needs and wants from these markets. It is known that
India is consider as one of the most attractive country for retail business because it has a high population as
well as developing market that ensures the growth of any kind of product as well as services. India plays a very
important role in world’s economy because it is the world’s largest democracy and in coming future it will
cross China’s population and become the most popular nation. Indian market is an emerging market and it is
also emerging as a successful e- commerce market of the world (Varottil, U, 2012). There is an expectation
that the market will increase by 60% by 2020 because of the changes in the factors like change in income and

the lifestyle. Now it is very easy for foreign companies to enter into Indian markets and there is a continuous
improvement on this.
India have a very complex market system but still there are many improvements in the infrastructure because
of the availability of foreign players in the market. Now 100% Foreign direct investment is allowed for foreign
companies by Indian Government and due to the same companies as CCD that face competition of Walmart.
India is still improving the market infrastructure for the growth. India is a country where there is a high trade
levels and it has a very important position in the global economy. There is a drastic change in the market all
over the world since World War II and it resulted in a big change in the organization as well as their marketing
strategies. These strategies are related to the development of new rules and regulations in the country. India is
in top five countries in top economies of the world. But there is a high inflation and the country is planning to
take different measures to control the inflation level and so that India can contribute more in global economy
of the world. It is necessary to maintain low inflation and high foreign investment in order to get a top position
in the retail markets of the world. It can also provide good competitive advantage to the country as well as
leads in earning high profits in the market (Steger, 2010).
Walmart has entered into the Indian market and came into direct competition with Indian e- commerce
company Flipkart. In the starting, it has acquired 77% of shares in Flipkart after entering India and now it has
been working with some other e- commerce websites as well. Walmart is also working with Amazon that is
also a very big player in Indian e- commerce market. Walmart selected India because they know that Indian
market is very large, and they can make their products and services as per their culture and fulfill their needs.
Walmart knew that if it has been entered in India then for sure the growth will increase. It has positive as well
as negative impact as if they come under competition with each other then it will be good, and Walmart will
make sure that they become leader of the marketplace and attract more customers for the products and services
(Stankevičiūtė, Grunda and Bartkus, 2012).
If Walmart become an organization that manufacture products and services for the Indian customers, then it
will become very difficult for them because they must firstly ensure that Indian people are interested in their
products and services. If Indian customers do not choose Walmart’s products and services, then it creates a

difficulty in competing with the other e- commerce organizations in the Indian market (Sadana, 2012). It
resulted in unhealthy competition because of the acquisition of FDI by Walmart. There are many rules and
regulations related to FDI but when Walmart entered in India they all were compromised.
Maintaining social relations are very important as it can be a success reason behind the success of e- commerce
company start in any marketplace. There is different type of groups believe in different social rules and
regulation so that they can be sure that Indian customers are attracted towards their products and services. It
also helps in assessing whether the organization would retain in the market or they must move out from the
marketplace. So, it is very important for Walmart to understand the social culture and beliefs present in Indian
society (Proctor, 2014).
India is knowing to be a very diverse country with different cultures and people use different languages to
communicate in this country. If any foreign company like Walmart wants to enter the business, then they must
cater to people belong to all the cultures and can get an advantage of good market position in the country. For
fulfilling the needs of people belong to different culture, Walmart must make sure to satisfy the needs of the
customers by delivering them the products and services of their choice. The organization must focus on the
pricing strategies more and ensure that the price is not very much low and not very much high. The products
and services have to be easily affordable by the people in the country. There are different segments in the
whole population and it is important for Walmart to find out the needs and wants of each segment and fulfill
them by providing right product. Walmart has to be aware about all the prevailing social issues to become a
successful retailer in the Indian retail market. Because of the acquisition of Flipkart, there are many problems
caused for Walmart because of this in the marketplace. One of the concerns is related to Walmart not abiding
by India Foreign Direct Investment Laws declared by the Confederation of All India Traders (CAIT). There is
an interference in the pricing and monitoring of products and services because of the Walmart not abiding FDI
laws belong to the country. It is suggested by the opposition side of Walmart that it is the responsibility of the
organization to maintain the rules and regulations of CAIT as it helps in maintaining a balance between the e-
commerce companies and foreign e- commerce companies. It results in ensuring the consistency emerging in