Billionaire enters fight to dominate Indian e-commerce
Walmart’s e-commerce unit, Flipkart Online Services, has signed a pact with tycoon Gautam Adani’s conglomerate to build one of the largest retail warehouses in India as the US giant gears up to battle Amazon.com and home-grown rivals in the South Asian nation.
The partnership marks the entry of Adani, India’s fastestrising billionaire, into the threeway fight for domination of India’s online shopping space. Up against the Walmart-Adani alliance is not just Amazon, but also Reliance Industries, the conglomerate owned by
Mukesh Ambani, the richest man in India and Asia.
They all want a slice of a market estimated to generate $200bn in sales by 2026. It has been turbocharged by pandemic restrictions that are keeping people away from brick-andmortar stores.
Adani Logistics, a unit of Adani Ports & Special Economic Zone, will build a 162,763m² fulfilment centre in its upcoming logistics hub at Mumbai and lease it to Flipkart, the companies said in a joint statement on Monday.
Expected to be operational in the third quarter of 2022, this warehouse will be able to store 10-million units of inventory, the firms said.
Bengaluru-based Flipkart will also develop its third data centre at the AdaniConnecX facility in Chennai to help the e-commerce company keep its data within India.
Adaniconnex Private is a joint venture between the US’s EdgeConneX and Adani Enterprises, the conglomerate’s listed unit.
Financial terms of the partnership were not disclosed.
Amazon has already invested heavily in fulfilment centres in India and its data-centric approach enables it to offer next-day delivery for select products in large cities, according to Utkarsh Sinha, MD at Mumbai-based consultancy Bexley Advisors. “It will be critical to see if Walmart’s plans follow a similar tech-first infrastructure approach, which could make Flipkart’s delivery and fulfilment more competitive.”
The new fulfilment centre being planned is likely to be flagship larger in area than the ones operated by Amazon in India so far, underscoring the potential size of the Indian market.
“We see this as a great opportunity to serve Flipkart’s physical as well as digital infrastructure needs,” said Karan Adani, CEO of Adani Ports.
The partnership is another sign of Adani’s rising clout: his conglomerate has rapidly expanded and diversified across sectors from coal mining to data centres, adding $24bn to his net worth this year. Riding a huge rally in his companies’ shares, Adani’s wealth has jumped to almost $58bn — the fastest rise in wealth globally.
THEY ALL WANT A SLICE OF A MARKET ESTIMATED TO GENERATE $200BN IN SALES BY 2026