Walmart Beats Amazon in $15B Flipkart Battle
bloomberg.com
bloomberg.com
I may be incorrect, but my understanding is that while Amazon pays a discounted rate, this is the same as any other bulk shipper for USPS, and in fact, without Amazon, many routes would not be profitable for USPS without Amazon.
> [Amazons] rates are kept under wraps. That said, we do know the Amazon deal is at least a break-even venture.
> That’s because the 2006 Postal Accountability and Enhancement Act made it illegal for USPS to price parcel delivery below its cost.
http://www.politifact.com/truth-o-meter/statements/2018/apr/...
I live three blocks from the post office, my grandma lives 25 miles and down a dirt road from her nearest post office. It's hard to argue that my deliveries cost the same as hers, yet we pay the same price for postage.
--edit: I hold no opinion either way on the subject, just clarifying based on what I understood from reading it.
Amazon is quite often not the lowest price. And, while they do still seem to be quite liberal with "send it back and we'll refund plus <mumble>", that doesn't matter if you can't get a genuine product because of all the counterfeits.
I'm pretty sure most of these comments are about Amazon India since that's what this discussion is about.
I buy everything on Amazon, and I've never had this problem. Do you have any data to back up this claim?
If you buy something used, or something with a lot of knockoffs (Xiaomi) or old tech (GameCube Controllers) there is a chance you will get a counterfeit.
I switched to buying all that stuff from eBay and it's much better. Untrusted-by-default makes eBay a very healthy marketplace to buy and sell in.
From a quick search (says “Apple Computer”, but tell me if that’s really made by Apple or not): https://www.amazon.com/gp/aw/d/B0787CFNRQ/ref=mp_s_a_1_3?ie=...
Another example from another quick search: https://www.amazon.com/gp/aw/d/B075CTVSVB/ref=mp_s_a_1_12?ie...
Then within the last year I've started receiving probably one out of five products being very blatant fakes. I only order Prime items and only sold from the manufacturer and only brand name, but I still get counterfeit items. It's actually driven me back to retail stores for items where I 100% need to get the real thing.
I just can't believe that Flipkart still doesn't have filter and sort by ratings. There can be arguments about how effective ratings are but this is one feature I definitely need for buying or booking anything - from my stationary to hotels and buses.
PS. I just logged in to Flipkart to check whether they have added that feature yet. I guess my last login was a year ago or more. Last purchase was on July 29, 2015.
So many things are out of stock, or not available for purchase.
The few things that are available for purchase are sometimes only offered by third-parties, who jack up the price by an exorbitant amount.
In India, Amazon is so good its hard to imagine how it will be sustainable. I paid $8/year for prime (yes a year) and they're now selling it at $16/year for free 24 hours delivery.
However, I can foresee how it may not be as good in the near future. Try buying a pair of Apple Airpods and one soon figures AMZN is not best place to make the purchase, it's so hard to tell which seller / product is genuine!
I ended up paying $30 extra for my backpack I bought recently because I didn't trust the Amazon items were real after reviews saying they were counterfeit. And these are Prime items, sold by the manufacturer, but they're stilling coming counterfeit.
Part of this sentence isn't true.
And in the meantime, I already used the cable and it burned my house down and now half my family is dead. But yeah, I can get a quick refund no problem.
Why do I care? What kind of ridiculous question is that?
Sure, you might want to exercise caution with some product categories and time sensitive things.
Amazon may have actually tried hard to prevent Walmart gain a foothold in online retail. Flipkart is reported as the largest or 2nd largest online retailer in India, to prevent that volume going to Walmart Amazon may have tried hard and pushed price in the process.
http://www.latimes.com/business/technology/la-fi-tn-amazon-s...
People love Amazon now, but I think it's time to fear it. They're already in bed with governments for multi-billion contracts, and are aiming for monopoly power. They won't behave well for much longer, and I'd argue they've already started behaving badly (raising prices on consumers, lowering commissions on affiliates, and so on).
as a consumer, i agree. but so do a lot of companies.
Run down the list of private sectors that spend the most on information technology -- health care, banking, retail, insurance -- and all of them worry Amazon is coming for them.
https://www.bloomberg.com/gadfly/articles/2018-02-15/worried...
I think Walmart's stinginess is also an important point here. At this price, plus the additional money they put in, a good ROI gets harder. Bezos has never really cared about short-term ROI, but I wonder if Walmart will be inclined to be impatient or under-invest later because of the high price now.
Walmart is getting help.
I’m guessing they wanted Softbank out for control in general and since Softbank loves to control, otherwise they could’ve saved another $4B and let Softbank keep 20% control.
As an engineer, Walmart Labs (their research division in Bangalore) is a much better fit to Flipkart's culture than Amazon.
The engineering talent pool in Walmart Labs and Flipkart are quite similar. In Bangalore, there are a handful of companies like Google, Amazon, Walmart Labs, Flipkart, and LinkedIn who can really pay the big bucks necessary to hire the topmost talent from India.
Among these, Google has a laid back culture and does not really excel in retail. Amazon has a stressful culture and I know plenty of people who could not take the stress and long hours of working in Amazon beyond a year and moved to one of the other four companies.
Walmart Labs, on the other hand, is quite similar to us. I think there will be a good exchange of ideas and skills between the two companies.
By the way, since a lot of people are commenting here that Amazon is killing it and they are number 1. That's true. But that's not a very relevant metric. For the owners and employees of a company like Flipkart, it is not all about being number 1. It is more about being able to make substantial profit and pay the employees well enough to keep competing with the likes of Google, Amazon, and Walmart Labs in order to hire the topmost talent.
Granted Flipkart is not doing very well in making good profits right now but we are trying to make the areas where Amazon is weak at as our strengths. For example, Amazon at this time does not ship large products (things that are bigger than what you can hold in a hand) to small towns and villages. We are trying to excel in that and it has helped us survive so far. With us becoming teams with Walmart Labs, I am hoping we will do even better.
But what you are saying is not the opposite of what I am saying.
You are saying: Flipkart is weak at delivering small items to small towns. I agree with this.
I am saying: Flipkart is strong at delivering large items to small towns and Amazon is weak at that.
Do you have examples where Flipkart did not deliver a large item (certainly much larger than your home router) such as a fridge or table to your small town? That would be an interesting example that would contradict what I am saying.
"Flipkart’s board ultimately decided a deal with Walmart is more likely to win regulatory approval because Amazon is the No. 2 e-commerce operator in India behind Flipkart and its primary competitor. Amazon is out of the running unless Walmart hits unforeseen trouble."
Doesn't sound like a battle to me.
You don't have to win every battle to win the war.
From anecdotal evidence, Amazon seems to be more popular among younger crowds in big cities who are likely to spend more and often
https://economictimes.indiatimes.com/small-biz/startups/batt...
see the detailed reviews on a handful of products and see the prices. General Amazon wins.
they may have PhonePe but is that a winner? PayTM dominates.
Can Flipkart succeed? maybe but 2 years from now if they didn't have this buyout I think they would have be a for sure in 2nd place. FK needed Walmart as much as Walmart thinks it needs FK.
Google's too disorganized and they don't have any supply chain tech built up. Amazon has years of supply chain infrastructure (both software, physical systems and organization) including supply/demand forecasting models and warehouse operational investment (Kiva systems, etc...).
The only differentiation that Google adds to Walmart is: - Top-talent engineering resources & brand which attracts talent to work on these problems - Layers of developer tooling and services that remove the "systems at scale" development curve of startups and smaller companies.
Now if Alibaba teamed up with Walmart... (read: acquired).
All of these companies can pay either as much as Google or more than Google to attract the topmost talent pool. In fact, many of the engineers in these companies frequently hop from one company to another between these. Of these, Amazon has the highest attrition rate due to stressful working conditions and they are sooner to leave to another company than the others.
Walmart Labs in Bangalore has a talent pool that is running a million node cluster based on OpenStack completely in house with zero dependency on something like AWS (of course!) or GCP. That's quite a feat and I think it will help Flipkart a great deal if Walmart Labs shares some of this incredible talent and resources they have built within their company.
Disclaimer: I work for Flipkart.
It works well for a large company with many moving parts and a need for Enterprise wide policies/quotas/etc, but has some rough edges and leaky abstractions. Kubernetes is a more mature and widely used system that has many of the same features, just based around containers instead of VMs.
Disclosure: I work for Walmart Labs on our CDN / Edge Platform team.
It looks like play to stop Amazon’s growth more than technology.
Google knows that I've been researching segways( with possible intentions of buying). Could they possibly use the information for product recommendations, inventory predictions ect?
What the Bloomberg article talks about is a joint venture of Walmart & Google in INDIA as a separate entity to buy Flipkart 75% stake.
I would guess, Google may take minority stake like 30% in that Joint venture, that may comfort Watmart .
Instaed of doing $15B on their own, and getting google skin to make sure the this takeover will success in long run aginst Amazon to put up $10 Billion and goole $5 Billion .
Instead of leaving Google, you could click on the product, see reviews and buy it directly from Google's UI.
Apple has an incredible grasp on supply chain, and Walmart and Amazon have a similar grasp on logistics. I think a lot of the knowledge in this space is about control and not necessarily solved by tech.
[0] https://techcrunch.com/2018/03/19/google-introduces-shopping...
Google's AI tech is superior than others in image and speech recognition as well as search. This mostly has to do with them literally buying all the AI talent.
Maybe a possible partnership with Waymo for level 4 driving tractor trailers.
If I am not mistaken, Waymo is already an offshoot with Google, so Google already has a strong foothold in autonomous vehicles
This last week, Amazon announced they are increasing Prime to $120/year, and I started thinking about whether I needed Prime. For video, Amazon is barely usable these days IMHO. I'm mostly watching entertainment on Youtube, mostly how-to or edu-tainment stuff which Amazon doesn't have much of. Pretty much anything I reach out to watch, I have to buy from Amazon. Their music service has been useless to me too, I started with Google Play by uploading all my music, and could never get started with Amazon because it was too limited.
The most compelling thing about Amazon is it is one place i can go that has pretty much anything I'm looking for. Drawer slides, Sugru, specific DIY tools.
I gladly pay $15/mo for Google Play Family (music, no commercials on Youtube, for me and my family). But, $10/mo for Amazon is starting to feel questionable, when Google Express gives me a similar experience, without the pain of Amazon Pantry (filling a Pantry box), and Walmart will let me buy groceries online and then will bring them out to my wife's car on her way home (she works a block from the store that provides that service).
I think it's getting harder and harder for Amazon to justify the $120/year. Curious what other people are thinking.
Yes. I think so.
Walmart Inc. and Google last August made it easier for people to shop from Walmart using Google's voice-activated home speakers. Similar partnership announcements followed between Google and other Amazon rivals including EBay Inc. and Target Corp.
https://www.bloomberg.com/gadfly/articles/2018-02-15/worried...
Anti-trust people would be all over that.
https://www.cips.org/supply-management/analysis/2017/june/ca...
Flipkart was the favorite child of online commerce and had dominated the space in India in the first 5/6 years. I have been an active customer. They did bring on large deals, like Motorola Moto G and Xiaomi Mi phones launching exclusively in India through them.
But as with our modern connected world, competition is global. Amazon is a huge brand. Even in India the software developer world literally bets on AWS. Yes brand presence is a thing in marketing/sales psychology. Amazon started offerening faster deliveries and that I what, I think I remember, made me to switch initially.
Early days of Amazon in India were fairly low profile. The product catalog was poor. But if you keep a tab on global brands, you know Amazon is pretty much a predator in supply chain management. So they slowly built up their infrastructure. I still remember having debates a few years ago about which e-commerce player delivers to more PIN codes in India. Flipkart was still a winner a few years back, but that is now history.
I think Flipkart lost focus somewhere, got busy with I do not know what. Their deliveries did not get better. Amazon is a 900 pound Gorilla and very silently played their cards, got customer attention and sales. I easily remember how many Flipkart delivery boxes I used to see on the roads daily, which are now more in the Amazon brand these days.
Oh and one other thing: English is very common in India, at least in the urban consumer - so that makes us very aware of the US companies like Amazon (even Walmart) and when they enter India we do want to give them a try.
But there's more to this. It's actually Walmart who is pushing this deal aggressively as they see it as a chance to tap into the increasingly growing Indian market. In past few years, Walmart did try numerous times to set up their shop here but due to certain FDI regulations they simply couldn't get in. Moreover, it is learned that Walmart (once the deal goes through) will be increasingly looking to expand Flipkart's nascent grocery related business. They want to overhaul the farm-to-customer supply chain and hence current stage of Flipkart and their logistics wing could be a real boon for Walmart. Walmart does have few retail stores in India but they are in JV with a telecom company owner Sunil Bharti Mittal.
On the other side, Flipkart badly needs capital infusion as they are bleeding or burning money at a crazy rate. Whatever edge they had currently in India over Amazon is due to Myntra's apparel sales. Flipkart, technologically speaking is lagging behind Amazon. And this is a real pain which almost all online retailers are facing. The same thing happened with another e-comm company SnapDeal (Also backed by Softbank).
One thing is for sure, to capture the Indian market and dominate it, either of these companies had to adapt quickly to cater to tier 2 and 3 cities of India. Whoever rules these cities and improve on last mile delivery experiences in these cities will rule Indian e-comm.
But on the other hand they had tons of strategy related snafus like going mobile-only for sometime etc. So, this seems like a good thing to happen, at least Flipkart can't run out of money with Walmart behind it.
Three way if you consider Walmart.
what a country like India is going to gain by letting American and Chinese companies destroy her local businesses and take the profit to the mainland!
Is this the new colonization?
I can only think of one recent IPO in India from tech space which did well, Infibeam[0]. But then again they had a good business model which didn't require burning a lot of money.
0. https://www.valueresearchonline.com/stocks/snapshot.asp?code...
If anything, foreign investment/companies have brought better days for Indian customers, even though it means more money draining out to US.
Those industries that are still protected(eg. There are no foreign universities) are still in bad shape.
You won't be able to compete with an already established player from US if you do a 1:1 same product. You should try to exploit something that works in the local market like what Line did for messaging in Japan or South Korea.
The foreign direct investment in retail sector is not all open in India. Also as far as I know, most companies can't move huge amount of money to mainland easily. Double taxation is one thing but there are other problems that forces companies to invest locally.
https://www.livemint.com/Companies/1EdpKoAY7GoZLh57pXuwkO/Am...
India is a highly price sensitive market with almost no loyalty when it comes to online purchases where price comparison is quick(er) to do.
Amazon has a lot of money to tire out its competitors to death. While I don't like Amazon for a few different reasons, the writing was on the wall for quite sometime as far as Flipkart was concerned.
I'd guess many people would be leaving Flipkart in the next one year and either working for the competition or start a new company to compete with it.
1 - google is going to participate in the purchase. Clearly a defensive move v amazon.
2 - us companies will now own the 1 & 2 positions for ecommerce in India. Start difference w China and somewhat surprising given Indias excellent engineering and biz culture
Also, my experience having worked and interviewed candidates in India for over 8yrs doesn't seem to disagree with that sentiment at all.
[0] https://www.zdnet.com/article/7-chinese-companies-that-will-...
[1] https://news.ycombinator.com/item?id=6429793
[2] https://economictimes.indiatimes.com/tech/software/google-to...
[3] https://yourstory.com/2015/05/twitter-war-sachin-rohit-bansa...
[1] and [3] Highly debatable and depends on which company you are hiring for. Good candidates are going to apply in companies they consider to be good. Snapdeal wasn't known for its good engineering, work culture or hiring bar. I don't know which startup the YC commenter interviewed for.
[2] might just be because of lack of active CS research going on in the country. Most people interested in research leave the country for better pastures. Btw MSR does have office in India
Over the last 18 years I have regularly had the opportunity to work with engineers located in India (while I was based in the UK and the US). Some projects were huge, some were small -- ranging from 2-3 engineers to hundreds. The vast majority of individuals I worked with were excellent at their job, and a delight to work with. Same as the ones I've worked with who have emigrated to Europe or America.
Emigration is not proof of an individual's superior powers, nor is non-emigration evidence of lack thereof.
Good for the US based players but bad for India. But it is not limited to just this. Most of the big Indian startups are funded by VCs from outside India. So, even if these companies grow big there is a good chance that most of it won't be owned or controlled by Indians. For example, PayTM(wallet, mall, bank) is funded by Alibaba. Ola is funded by Softbank and this is true for almost all the big startups.
Walmart could come along and directly compete in the market by themselves. Wonder why this acquisition is needed at all. There's hardly anything defensible in Flipkart's assets, and this acquisition isn't at a deep discount.
"A woman will buy anything she thinks the store is losing money on" --Kin Hubbard
Amazon search, A9, was originally meant to take on Google back in 2003 as a comprehensive search solution. It failed spectacularly at that.
The Amazon phone, a shot at Apple's massive profits. A total failure.
Amazon attempted to take on eBay in auctions, they failed.
Amazon attempted to take on Craigslist in classified ads, another failure.
Amazon has been attempting to figure out a way to dominate the music category for 15+ years, they've repeatedly failed. They're very far behind Apple and Spotify when it comes to stand-alone music services.
Amazon's local daily deals service, Amazon Local, failed (shut-down in 2015). They also burned $175m on LivingSocial during the Groupon mania years as part of that overall sector effort.
They attempted a competing mapping service to Google Maps, that ended up being a mediocre product (with a few technical innovations) that nobody used. They quickly discovered how difficult and expensive it is to build a competing product to Google Maps.
Amazon failed with travel, attempting to go after Priceline's profits, they shut down Amazon Destinations in 2015.
They failed with Local Register, which was some kind of mediocre shot at Square's market.
Amazon essentially takes shots at anything that pops up and demonstrates an ability to make money. They fail overwhelmingly, and then very rarely they get a homerun like AWS which pays for it all many times over.
People of any region tend to be antagonistic towards crude attempts to force a foreign language and culture upon them. Hindi has no common ancestry with South Indian languages like Tamil. In fact, Hindi-Urdu-Farsi is from the same language family as English. Therefore, Hindi is just as foreign as English to South India and therefore it makes much more sense for South Indians to speak their native tongues and a useful foreign language like English or perhaps Mandarin in the future rather than be forced to learn Hindi.
Almost everyone middle-class and up can atleast read English so makes sense that online retailers use that.
The battle in india is far from settled, it is important to look category wise. Moreover in context e-commerce one should not ignore alibaba backed paytm which seems to be working on a super app strategy and big basket which is into grocery.
Website visits- Amazon seems to be ahead. From Jeff's shareholder letter - "Amazon.in is the fastest growing marketplace in India, and the most visited site on both desktop and mobile, according to comScore and SimilarWeb. The Amazon.in mobile shopping app was also the most downloaded shopping app in India in 2017, according to App Annie. " This does not include numbers for Flipkart owned myntra I think adding that might take Flipkart ahead since myntra is the biggest in fashion. Moreover play store might not give a complete picture since many devices come pre-installed with apps in India, my phone had Amazon app pre-installed which will not count towards play store download.
Mobiles - This currently the biggest category in e-commerce. Accounting for 60-70% of sales. Here they are neck to neck but it is hard to make out clearly since e-commerce is heavily driven by exclusives and brands like Lenovo and Xiaomi are playing them against each other.
Fashion - Myntra owned by Flipkart is ahead here. Amazon is catching up but is challenging to match a vertical player in user experience.
Electronics - I don't think there is a clear leader here. Due to logistical challenges for major brands it is still convenient to buy offline apart from some sales period when discounts can be really high in e-commerce. Of late though lot of offline stores are ready to match the ecom players, I saw this while buying TV plus they had faster delivery and installation. This might play out like mobiles with lot of Chinese brands who don't have offline networks competing on pricing and using e-commerce for distribution.
Grocery - Amazon has a lead over Flipkart. It has multiple plays like Amazon now, Pantry etc. Flipkart is piloting a model similar to now in bangalore. The competition comes here from alibaba backed big basket which also has perishables and in my personal experience provides better service vs Amazon. Walmart might give a boost to flipkart here with its expertise in grocery. However unit economics are worst in this category. High weight low average selling price means shipping cost eat up a lot of revenue.
Video - Amazon has more users than Netflix. The challengers here are Jio with it huge base, cheap data and good library and hotstar with its biggest strength being Indian TV shows and live cricket and football. This is extremely nascent in India so every network has their own app but these two + Netflix seem the most likely to be around for long. Netflixs pricing in India is pretty high so will be mostly used by the affluent sections and not mass.
This deal was unusually public. I think Amazon was never seriously into it. The valuation is insane plus Amazon would have run into some antitrust issue plus this being an election year in India, government might act tough against such acquisition. The good thing with Walmart is that there might be more sanity in the market since it is a listed company and can't just burn VC money.
Like today, I ordered a downrod for a ceiling fan. I don't even know if Flipkart stocks it.
Amazon has got the long tail of retail right at least
Amazon needs some more major competition.
Both Walmart Labs and Flipkart hire the best computer scientists and software engineering talent from across the country. They pay as much as and sometimes more than what Google Bangalore pays its engineers.
With Walmart now acquiring a majority stake in Flipkart, I can see the two strong and highly skilled engineering centers coming together and forming a formidable team to give a tough competition to Amazon.
Kosmix is a search engine that allows users to perform advanced searches via multiple filters.
MeeHive delivers news to your iPhone and iPod touch that reflects your interests. But for a service so focused on the reader's interests
Right health which is a health focused kosmix?
TweetBeat - a twitter client with filtering?
I mean, not exactly xerox/PARC
- http://lacinia.readthedocs.io/
Here are a couple of other interesting Walmart Labs projects I came across:
How many nice things have Amazon open sourced?
Good research need not always be open sourced. That is irrelevant to it's quality.
The GP asked for a good thing that came out of Walmart Labs hinting at the idea that good things come out from Amazon but not Walmart Labs. Then a few commenters pointed out a few links showing the good things that came out of Walmart Labs. All of these good things happen to be open source. So it is quite natural to ask what good things Amazon bothered to open source after having built a billion dollar business on top of open source.
Seriously, Walmart and Clojure? Who would have imagined! I always thought of Walmart as a boring and traditional company that sells cheap goods. So when I heard about Walmart Labs, I thought all their coding must be in C++ or Java or even Cobol (who knows!).
But to see them using a dialect of Lisp like Clojure and Go more than Java and C++ warms my heart. :-)