One has to admire the foresight, grit, perseverance and “guts of steel” of Sachin and Binny Bansal
for creating a mind-boggling valuation of $ 20 billion in a relatively short period. Unlike “doomsday” critics who look at the Walmart-Flipkart deal as a “sell-out of the country’s jewels” I feel the takeover has a lot of positives for us all.
First, the Indian customer has a lot to gain. Walmart is the world’s most competitive company. It manages to procure at the lowest prices, its own expenses per unit of sale are low — helped no doubt by its size — and the logistics are amazing, all of which will help Indian consumers. Secondly, Indian farmers can hope to get better returns, with speedy transportation and there should be some savings by cutting out the long chain of middlemen.
Finally, the projected rapid growth of the new version, going by their track record worldwide, should see a lot of direct and indirect job creation and the emergence of thousands of “service providers” — small and medium enterprises — to feed the big company. They will need myriad relationships; transporters, storage facilities, manufacturers, the entire value chain. Irrespective of any conditionalities of minimum local sourcing percentage, they would automatically want to procure from the domestic guys and in the process force them to compete with Chinese, Bangladeshi, Vietnamese and Korean suppliers.
I do hope regulatory bodies will not put hurdles in the way of this merger.
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