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Walmart and Adani join hands to build massive warehouse in India

The tie-up signals Adani conglomerate jumping into the three-way battle between Amazon, Walmart and Reliance Industries for India’s online market.

Image Courtesy:businessoffashion.com

Walmart Inc’s e-commerce unit Flipkart Online Services Pvt signed a pact with billionaire Gautam Adani’s conglomerate to build one of the largest retail warehouses in India, reported Bloomberg news on April 12, 2021.

The move is in preparation of a battle between Amazon Inc. and homegrown rivals to dominate the local market in India. Walmart and Adani’s partnership marks Adani entry into this battle for the online shopping space that also includes Reliance Industries Ltd., the conglomerate owned by Asia’s richest man Mukesh Ambani.

According to reports, each company wants a slice of the online market that is estimated to generate $200 billion in sales by 2026, especially considering pandemic regulations that distance people from physical shops.

A joint statement on Monday stated that Adani Logistics Ltd., a unit of Adani Ports & Special Economic Zone Ltd., will build a 5,34,000-square-feet fulfillment centre in its upcoming logistics hub at Mumbai, then lease it to Flipkart. The warehouse is expected to be operational in the third quarter of 2022 and at the size of about 11 football fields can store 10 million units of inventory.

Further, Bengaluru-based Flipkart will also develop its third data centre at Chennai’s AdaniConneX facility to help the e-commerce company keep its data within India, said the company. AdaniconneX is a joint venture between the U.S.’s EdgeConneX Inc. and Adani Enterprises Limited., the conglomerate’s flagship listed unit. The statement did not disclose financial terms of the partnership.

However, it is said that the new centre will likely be larger in area than the ones operated by Amazon, underscoring the potential size of the Indian market.

Adani Ports Chief Executive Officer Karan Adani told Bloomberg that the company considers it a great opportunity to serve Flipkart’s physical as well as digital infrastructure needs. The partnership also indicates Adani’s growing clout with his coal mining-to-data centres conglomerate that rapidly expanded and diversified across sectors, adding $24 billion to his net worth in 2021. Riding a massive rally in his companies’ shares, Adani’s wealth jumped to almost $58 billion — the fastest rise in wealth globally.

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