Amazon vs. Walmart...Round 3
Walmart, the world’s largest retailer has struggled against Amazon on the internet. India, with 1.3 billion people is the next big potential prize after the U.S. and China, and so Walmart and Amazon has also been brewing for India’s e-commerce with the first round going to Walmart.
In May of 2018, Walmart bought 75% of India's largest online retailer Flipkart for $16 billion in May 2018. This was a major victory for Walmart because Amazon is the No. 2 e-commerce operator in India behind Flipkart. But the Markets saw the purchase as a negative saying that Flipkart was struggling outside of India and Walmart’s profits would take a hit in 2019.
Part of the deal was Flipkart's digital payments subsidiary called PhonePe. In 2019, Flipkart’s board authorized the PhonePe Pvt Ltd to operate as a new entity. PhonePe -- which means “on the phone” in Hindi and is pronounced “phone pay” -- has grown into one of India’s leading digital payments companies. Although PhonePe was seen as a throw in, it could be worth $14 to $15 billion down the road.
During a 2019 Amazon quarterly earnings’ conference call, Brian Olsavsky, the chief financial officer said they are evolving their Prime free two-day shipping program to be a free one-day shipping program. After Amazon made the announcement of moving to one day shipping, Walmart twitted the following:
According to Consumer Intelligence Research Partners (CIRP), Amazon Prime ended 2019 with 112 million U.S. which is up from just over 100 million at the end of 2018 and more than double the 50 million Americans who were using Prime at the end of 2015.
Members benefits include free shipping for eligible purchases, streaming of movies, TV shows and music, exclusive shopping deals and selection, etc. Amazon’s goal with Amazon Prime is when you run out of toothpaste or toilet paper, instead of running to the store, you order it (and maybe you will see some other things you need) and you will have it the next day.
Walmart has over 156 distribution centers and a network that can compete with Amazon on any level. So what did they do, they announced their own Amazon Prime rival.
When Walmart+ launches, the $98 annual membership is expected to include unlimited same-day delivery of groceries and other goods from Walmart Supercenters, reserved delivery slots and open-slot notifications, as well as some access to Walmart’s new Express two-hour delivery offering, though not unlimited usage.
Walmart+ perks are also expected to include discounts on fuel at Walmart gas stations, early access to some product deals, and a Scan & Go service that would allow shoppers to check out in Walmart stores without waiting in line.
Walmart also has plans to add video entertainment components to the program, though the details of this remain unclear.
On the news, the stock went higher as the Markets saw this as good news. Since COVID-19 and I millions of other people have used the shop (online) and pick up service Walmart offers. I can't say I will purchase the Walmart+, but it will be seamless step for many to take moving forward.
Look for price to test all-time highs after Walmart+ is up and running.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance