The entry of Facebook into the Indian retail market through an investment into Jio Platforms is “not surprising,” Brett Biggs, CFO of Walmart, said in the 36th Annual Bernstein Strategic Decisions Conference on Wednesday. Biggs said that the Indian market is “competitive” and that the country with a population of 1.3 billion people is “going to attract a lot of investment.” In April, Reliance Industries said that the Facebook would invest Rs 43,574 crore into Jio Platforms for an 9.99% stake. The deal was said to be the largest Foreign Direct Investment (FDI) in the technology sector in India.
Flipkart is Long Term Investment for Walmart
Additionally, Facebook and Reliance said that the consumers would soon be able to get in touch with their nearest kiranas for products that can be delivered to their homes. The companies said that the consumers can transact seamlessly through the JioMart and WhatsApp platforms. Since the announcement in April, JioMart service has expanded to over 200 cities across India. The JioMart service was initially available in pilot phase in selected areas of Mumbai but Reliance on Sunday expanded its presence to include metros and other major cities.
Meanwhile, Jio Platforms has also attracted investment from several other players including Vista Equity Partners, General Atlantic and KKR in the past month.
Biggs said that Reliance has been a competitor for Walmart for years. Walmart, the US retail giant paid US$16 billion in May 2018 to acquire 77% stake in Flipkart but Biggs said that Walmart was keen to enter the Indian market since 2004.
“India's competitive, we knew that,” Biggs said. “So, when you have 1.3 billion people, it’s going to attract a lot of investment, a lot of the reasons why we went there. So, it's not surprising.”
Biggs said that the Flipkart is a long term investment for Walmart and that it’s “great business” for the company.
COVID-19 Lockdown Halted Flipkart
Further, Biggs highlighted that Flipkart was virtually forced to shut down through most of April due to government regulations but that the e-commerce site is closer to its normal operations.
“We're starting to get back to a little bit more normal operations there,” Biggs said. “And just like with every other country, I think India will go through a different cycle. They were pretty early to shut the country down. So, we'll see how that plays out.”