Walmart announced its new retail subscription service Walmart Plus with which it hopes to rival Amazon Prime on price and in-store perks. The company-owned Flipkart already operates a loyalty program in India, which makes it easier for the company to bring its new value proposition down.
The Walmart Plus service is available for $12.95 a month, which is about four cents cheaper than the deal Amazon Prime provides. However, both ensure unlimited free deliveries, access to early product deals and can include same-day deliveries. In the US, Walmart gains the edge over its rival by providing in-store perks at over 5000 scores with same-day shipping. Plus there could be discounts on products too.
The first thing that Walmart would have to do for an Indian launch of Walmart Plus is to considerably reduce the subscription as Amazon Prime charges Rs.129 a month, which translates to just about $1.77 at prevailing exchange rates.
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A head start for Amazon
Also, Amazon has already claimed a decent chunk of the market, with more than 15 million subscribers to its Amazon Prime subscription. During the Prime Day sales in India on August 6 and 7, the company reportedly saw a 2X jump in subscribers, with more than 65% of the additions coming from outside the top-10 cities of India.
Besides access to early deals, same day deliveries free of additional cost, subscribers to Amazon Prime also get the added benefit of a free membership to its Prime Music and Prime Video streaming service, which has taken on Netflix and Disney Plus HotStar in India with original programs and titles like never before.
Where Flipkart stands now
Against this bouquet of offerings, Flipkart has found its subscription service (or is it a loyalty program?) rather tame. To unlock the deal, users need to splurge Rs.12,500 on a single invoice. This would give them the 50 coins required to join the Flipkart Plus service. Of course, if one has spent considerable amounts shopping on the portal, there is a possibility that Flipkart Plus is auto-unlocked. And once you are a member, you could avail of a coin for every Rs.250 you spend.
And what do the customers get? For starters, you get early access to their Big Billion sales. There's free priority shipping, priority customer care and rewards in the form of coins on almost every purchase. In addition, subscribers also get special offers from other websites for movie tickets, music, travel and home delivery.
What we expect from Walmart Plus in India
If and when Walmart decides to offer the Walmart Plus service to India, we believe that it would come at a much cheaper cost than what US customers pay. Because it needs to beat the price of the Rs.999 per year price that Amazon Prime comes at. And, if there are no movies or music streaming services coming with the package, the charges need to be lower by at least Rs.200 to Rs.250 a year.
Flipkart had claimed a million subscribers when they launched the loyalty program two years ago, but haven't shared details of its success thereafter. The company had offered Flipkart Plus users early access to its Republic Day sales this January. Post the event, the Walmart-owned company did not share data over how its loyalty program fared, which makes us believe that the program isn't panning out the way the company had hoped for.
Which is why it would make sense for Walmart Plus to hit Indian shores in some or the other format. The price band would definitely have to be lower as a $98 per year package amounts to around Rs.7,100 at the prevailing exchange rate. And, Flipkart would definitely need to provide some extra entertainment over and above what is available on Flipkart Video with the subscription to effectively counter Amazon Prime's streaming service.
A streaming suspense
Flipkart Videos began streaming last October, but till date, the company hasn't really focused on this side of the business. Though they claim more than 5000 titles across multiple languages, the service hasn't really kicked off in the face of stiff competition from the big daddies of the business. Netflix, Amazon Prime, Disney Plus HotStar, SonyLiv and a host of regional streaming services vie for audience attention in India.
Could this mean a deal with arch-rival Netflix or possibly Disney Plus HotStar? There is also Jio Platforms, which Walmart is negotiating for a stake acquisition. This way Walmart could get access to Jio's streaming service, which could be just what a rival subscription service offering could do with.
Given that India is witnessing an anti-Amazon move spearheaded by Reliance Retail, it would definitely make sense for Walmart to join hands, even if at the peripheral level.
