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Google To Go Solo In Indian Ecommerce War, No Plans To Invest In Flipkart

Google To Go Solo In Indian Ecommerce War, No Plans To Invest In Flipkart

• Google was earlier expected to invest $1-2 Bn in Flipkart along with Walmart
• Google is expected to venture into Indian ecommerce space
• Walmart expected Google’s strength in building online shopping ecosystem in India

Developments in the competitive Indian ecommerce space have been getting more exciting by the day. A few days ago, reports said that Google would be entering the space with its own venture. Prior to that, there were reports that Google planned to invest in Flipkart along with Walmart. But for now, those plans have fallen through.

The latest buzz in the ecommerce space is that Flipkart’s senior management has rejected Google’s investment offer as it looks at the search giant as a potential rival. They are of the opinion that an investment would enable Google to gain access to the company’s database, which would be to its advantage in launching its own retail venture in the country.

Reports also surfaced that Walmart, however, was keen on the Google investment in Flipkart as it believes that the global search giant would help build an online shopping ecosystem along with its artificial intelligence (AI)-powered speaker, Google Home. Walmart felt Google would help it counter the threat from Amazon, which has its Alexa-powered smart speakers, Echo, and internet-streaming services Amazon Prime Video and Music.

A Google India spokesperson said, “This is all speculative and we currently have no plans to bring Google Express to India.”

An email query sent to Flipkart didn’t elicit any response till the time of publication.

At present, global retailer Walmart is addressing legal concerns about the acquisition of a 77% stake in Flipkart for $16 Bn. Recently, Walmart also assured the Indian tax authorities that it would fulfil all its taxation commitments in the deal.

After the Flipkart acquisition, Walmart has been exploring opportunities in India and is looking to make tech acquisitions in India to strengthen its technology unit, Walmart Labs.

Following the acquisition, Flipkart has been increasing its commitment to the Indian market with several new initiatives, including a foray into fintech for which it has sought NBFC certification.  Flipkart has also set its next target — a gross merchandise value (GMV) of $17.6 Bn by 2020-21.

On the other hand, Google’s Caesar Sengupta, who leads product management at its global headquarters, is likely to test the ecommerce launch in India before taking this new business to other emerging markets.

With a power base of over 18 Mn (for Gmail) and several other features, including support for vernacular content, Google may eventually find its way into the Indian ecommerce industry, but, for now, it looks like it will take some time.

[The development was reported by TOI.]