When US retail giant Walmart agreed to buy the Indian company Flipkart in May for $16bn, it was easily the world’s biggest ecommerce buyout — a powerful sign of how India’s digital sector is capturing the attention of some of the largest global companies.
Start-ups such as Grofers are set to face stiff competition from Flipkart, which is poised to pursue a big expansion into groceries, says the retail consultant Sanchit Vir Gogia. Many niche businesses will ultimately need to sell out to Walmart or Amazon, as the two companies take advantage of their economies of scale, he says. “The cost of customer acquisition is so high — it’s not sustainable in the long term.”
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Analyst:
Sanchit Vir Gogia: Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, an award-winning global research & advisory firm. To read more about him, click here.