India’s retail sector is in focus as Walmart consolidates its portfolio under the Flipkart Group while arch-rival Amazon eyes a stake in the country’s largest retailer.
Flipkart’s wholesale business
Flipkart’s wholesale unit will acquire Walmart India’s cash-and-carry business that owns the Best Price brand, as it looks to scale its business-to-business vertical. The move comes nearly two years after Walmart acquired a majority stake in the homegrown retail major for $16 billion.
Earlier this month, Walmart also led a $1.2 billion investment in Flipkart Group, valuing the company at $24.9 billion.
What’s the plan?
Flipkart Group said it is launching a wholesale business called Flipkart Wholesale next month, starting with fashion and grocery categories. Flipkart senior vice-president Adarsh Menon will be leading this initiative.
Walmart India employees will transition to the Flipkart Group while India chief executive Sameer Aggarwal will remain with the company for the transition, after which he will move to another role within Walmart. The Best Price brand will continue to operate via its network of 28 stores and ecommerce operations.
Focus on kirana
The Covid-19 pandemic has accelerated the willingness of small businesses to use technology to scale operations, opening up a market that had in the past viewed tech companies as a competitor. About three out of four mom-and-pop stores have no exposure to technology platforms for any service including payments or procurement, as per a recent report by Redseer Consulting. Read more.
Amazon eyes Reliance Retail stake
Flipkart rival Amazon is in talks to buy a 9.9% stake in Reliance Retail, the retail arm of Reliance Industries, reports ET Now citing sources. It says that Amazon wants a preferred strategic stake in Reliance Retail for its would-be competitor JioMart that was launched in May. JioMart, which currently retails grocery, plans to expand into segments such as fashion, electronics, pharmaceutical, and healthcare.
Last week, Reliance Industries chairman Mukesh Ambani had said that they will induct global partners and investors in the unit in the next few quarters after receiving “strong interest from strategic and financial investors”.
Jio Platforms gold rush
This move comes after Reliance Industries raised more than Rs 1.52 lakh crore from a clutch of 13 global investors including Facebook and Google by selling stakes in Jio Platforms over nearly three months.
Morgan Stanley had recently pegged the net asset value of Reliance Retail at about $29 billion due to the increasing revenue contribution from its ecommerce venture JioMart over the next three years.
On the other hand, Amazon is also wooing offline stores with its ‘Local Shops on Amazon’ initiative that enables local retailers to do more business through their platform.
Future Group Deal
Amazon may also get shares in Reliance Industries as the Indian conglomerate nears a deal to buy the Future Group’s retail businesses.
Amazon, which has had a business tie-up with Kishore Biyani’s Future Group since 2014, also owns an indirect stake in Future Retail after picking up a 49% stake in Future Coupons, a promoter group company of Future Retail last year.
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Demand for spiritual content
Internet companies have seen a jump in the consumption of religious, astrology, and wellness content since March this year.
With most places of worship shut, religious organisations are also depending on platforms like YouTube, Instagram, and Zoom to broadcast their content. Live-streaming of festivals, recorded sessions of church services and daily meditation and yoga classes on WhatsApp and Facebook are also gaining popularity.
Growth by the numbers
- Spiritual content focused app Rgyaan has seen the count of its daily active users increasing by around 7,000 since March.
- Social media platform ShareChat saw a 43% increase in devotional content in April. More than 40% of the content was videos in the devotional category.
- Music streaming service Gaana* saw a 14% increase in devotional music playlists during April-May. Read more.
Microsoft’s pandemic boost
Microsoft had a stellar fourth fiscal quarter with several of its divisions benefiting from the effects of the Covid-19 pandemic that drove many people to adopt remote working as they stayed at home due to the lockdown curbs while forcing businesses to go digital to engage with customers.
Key Numbers
- Revenue grew 13% to $38 billion. Profits fell 15% to $11.2 billion due to increased tax charges from last year
- Microsoft’s “intelligent cloud” division which includes its Azure service saw a 17% jump in revenue to $13.4 billion. Azure saw a 47% sales growth.
- Personal computing segment including the Windows operating system saw a 14% revenue growth to $12.9 billion.
- Revenue of its Xbox gaming service soared 65%, Xbox hardware revenue grew 49% and Surface device sales were up 28%.
- Productivity and business process segment that includes LinkedIn, Office 365 commercial subscriptions and Dynamics saw a modest 6% revenue growth.
Slack’s EU complaint: Workplace messaging service Slack filed an antitrust complaint against Microsoft in the European Union, accusing them of anti-competitive behaviour. Slack alleged that the tech giant was bundling Microsoft’s workplace chat and videos app Microsoft Teams into Office 365.
Wipro’s acquisitions
Wipro said it is acquiring Salesforce implementation partner 4C for $79 million (68 million euros).
4C is one of the largest Salesforce partners in the UK, Europe, and the Middle East and this acquisition is expected to help the IT firm strengthen its position as a Salesforce solutions provider in these markets.
This is Wipro’s second acquisition after Thierry Delaporte took charge as the chief executive officer earlier in the month. The Bengaluru-headquartered software services exporter had recently acquired Brazil-based IT services firm IVIA Serviços de Informática for $22.4 million.
Last week, Delaporte told ET that acquisitions will be part of the company’s agenda “We will continue to look for companies that are reinforcing our position in areas that we feel are strategic; it can be a specific market, industry or technology,” he had said. Read more.
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(Illustrations and graphics by Rahul Awasthi)
*Disclosure: Gaana was incubated by Times Internet that also owns ETtech
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