Google’s plans of investing in Flipkart seems to have hit a roadblock. The senior management in Flipkart has reportedly expressed their apprehensions on the move to allow Google’s presence in the company since if it launches Google Express in India, then it would be a rival to Flipkart.
When the Walmart-Flipkart deal was extensively reported, there were mentions of Google’s parent Alphabet also picking up a small stake in Flipkart. This was based on the partnership Walmart and Google have forged where Google’s online retail platform Google Express sells Walmart’s products. It was felt that the same association would be carried to the Indian market as well.
However, the Board of Directors is likely to recommend that Google’s investment proposal be rejected.
The report goes on to claim that a spokesperson for Google India has stated that the company has no plans to launch its online store Google Express in India. The interesting question would be if Walmart is comfortable working in the US market with Google Express and if it is going to be owning 77% of Flipkart why there should be an issue in the Indian market.
There are strategic reasons for Walmart associating with Google. Its immediate competitor in the US and most markets it has entered/entering in is Amazon. There are certain advantages that Amazon enjoys which Walmart doesn’t. For example, products like the Alexa-based Amazon Echo or the video streaming Amazon Prime Video service are areas where Amazon scores over Walmart. Google brings these to the table with the Home speaker range and with its search engine advantage to help with online advertising and going ahead even integrating the YouTube videos into their business just for the sake of competition.
For Walmart, the bagging of Flipkart comes after years of wanting to enter the huge market that is India and having secured the chance, how it utilizes it to compete with and beat Amazon at its own game will definitely be observed keenly.