Walmart Plans Massive India Warehouse With Billionaire Adani
(Bloomberg) -- Walmart Inc.’s e-commerce unit, Flipkart Online Services Pvt., signed a pact with tycoon Gautam Adani’s conglomerate to build one of the largest retail warehouses in India as the U.S. giant gears up to battle Amazon.com Inc. and homegrown rivals in the South Asian nation.
The partnership marks the entry of Adani, India’s fastest-rising billionaire, into the three-way fight for domination of India’s online shopping space. Up against the Walmart-Adani alliance is not just Amazon, but also Reliance Industries Ltd., the conglomerate owned by Mukesh Ambani, India and Asia’s richest man.
They all want a slice of a market estimated to generate $200 billion in sales by 2026 -- turbocharged by pandemic restrictions that are keeping people away from brick-and-mortar stores.
Adani Logistics Ltd., a unit of Adani Ports & Special Economic Zone Ltd., will build a 534,000-square-feet fulfillment center in its upcoming logistics hub at Mumbai and lease it to Flipkart, the companies said in a joint statement Monday. Expected to be operational in the third quarter of 2022, this warehouse -- roughly the size of 11 football fields -- can store 10 million units of inventory, the firms said.
Bengaluru-based Flipkart will also develop its third data center at the AdaniConnecX facility in Chennai to help the e-commerce company keep its data within India, according to the statement. Adaniconnex Private Ltd. is a joint venture between U.S.’s EdgeConneX Inc. and Adani Enterprises Limited., the conglomerate’s flagship listed unit.
Financial terms of the partnership were not disclosed.
Amazon has already invested heavily in fulfillment centers in India, and its data-centric approach enables it to offer next-day delivery for select products in large cities, according to Utkarsh Sinha, managing director at Mumbai-based consultancy Bexley Advisors. “It will be critical to see if Walmart’s plans follow a similar tech-first infrastructure approach, which could make Flipkart’s delivery and fulfillment more competitive.”
The new fulfillment center being planned is likely to be larger in area than the ones operated by Amazon in India so far, underscoring the potential size of the Indian market.
“We see this as a great opportunity to serve Flipkart’s physical as well as digital infrastructure needs,” said Karan Adani, chief executive officer of Adani Ports.
The partnership is another sign of Adani’s rising clout: his coal mining-to-data centers conglomerate has rapidly expanded and diversified across sectors, adding $24 billion to his net worth this year. Riding a massive rally in his companies’ shares, Adani’s wealth has jumped to almost $58 billion -- the fastest rise in wealth globally.
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