The eCommerce unit of American retailer Walmart has signed a pact with the Indian tycoon Gautam Adani to build one of the largest retail warehouses in the south Asian country, as they prepare to battle eCommerce mammoth Amazon and homegrown rivals in the nation.
The partnership marks the entry of Mr. Adani, India’s fastest-rising billionaire, into the three-way fight for a larger slice of India’s online shopping space, a market estimated to generate $200 billion in sales by 2026. Up against them is not just Amazon, but also Reliance Industries, the conglomerate owned by Mukesh Ambani, the country’s and Asia’s richest man.
Adani Logistics, a unit of Adani Ports & Special Economic Zone, will build a 534,000-square-feet fulfillment center in its upcoming logistics hub at Mumbai and lease it to Walmart’s Flipkart Online Services, the companies said in a joint statement. 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.
Walmart-owned Indian eCommerce company Flipkart will also develop its third data center at the AdaniConnecX facility in the south Indian city of Chennai to help the firm company keep its data within India, according to the statement. Adaniconnex Private is a joint venture between US’ EdgeConneX and Adani Enterprises, the conglomerate’s flagship listed unit.
Meanwhile, the financial terms of the partnership continue to be kept under wraps.
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 Mr. Adani’s rising power. His coal mining-to-data centers conglomerate has rapidly expanded and diversified across sectors, adding $24 billion to his net worth this year. Thanks to a massive spike in his companies’ shares, Mr. Adani’s wealth has jumped to almost $58 billion which is the fastest rise in wealth globally.