The move may have been encouraged by the implementation of new norms for FDI in e-commerce. A Morgan Stanley report had said that Walmart exiting India is a possibility
The Economic Times report read, “Flipkart is ideally looking for companies with revenue of Rs 1,000-2,000 crore that have little or no online presence so that Flipkart could push its products worth Rs 250-500 crore through each of them,” said a person familiar with the matter. Such companies may even sell goods that are not from their line of business, as long as their sales from the platform stays below the prescribed 25 per cent limit.”
After-effect of implementation of new norms for FDI in e-commerce?
A recent report issued by Wall Street giant Morgan Stanley had said that Flipkart may need to remove 25 per cent of items from ts marketplace. Going by the figures, the research firm believes that Flipkart’s revenues are mostly driven by electronics and smartphones sold through its channel in India.
The report read, “We estimate that Flipkart derives 50 per cent of its revenue from this category, meaning Flipkart could face meaningful disruption and top-line pressure in the near term.”
Faisal Kawoosa, founder and lead analyst had earlier told EFY, “The implementations have indeed impacted the sales. But what is more concerning is it is impacting the overall experience that these players were known for providing. As per our estimates, it has impacted 20 per cent sales for CE including mobile phones.”
Morgan Stanley’s report also mentioned,”Walmart is financially and strategically invested in India via Flipkart. We do not think it is considering walking away from its investment at this stage. It is still too early to say how the e-commerce landscape in India may change.”