Walmart, the American multinational retail corporation is reportedly in talks with Flipkart to buy more than 40-percent of its share. Flipkart is one of the largest e-commerce player in India and currently commands 60 percent of the Indian e-commerce market share. Flipkart is currently the biggest direct competition to Amazon India.
At this juncture, the terms and conditions of the deal are not disclosed. That being said Flipkart is currently valued at $12 billion after a series of earlier devaluation. Flipkart has been devalued by Morgan Stanley consequently for five times. In the recent round, Vision Fund roughly purchased a fifth of the total shares by investing $2.5 billion. When Reuters asked about the details, both Flipkart and Walmart declined to comment.
That being said the fund infusion will help Flipkart to enrich its war chest against Amazon. This is not the first time that Walmart has partnered with e-commerce companies outside the U.S. The retailer has already acquired online retailer startups like jet.com and has also partnered with Japan’s Rakuten when it comes to online grocery deliveries.
Walmart currently operates 21 stores in India and has been straying away from traditional retail. With the Flipkart Deal underway, Walmart is expected to get a better grip on the ever-expanding Indian e-commerce market which is pegged at $200 billion in a decade. Needless to say, Walmart is strengthening its position by acquiring e-commerce startups. Meanwhile, Amazon is speculated to have eaten a giant share out of Walmart’s brick and mortar market and perhaps this is the best chance for Arkansas based Walmart to expand its horizon and indirectly enter the Indian e-commerce scene.
Ever since its inception in India in 2008, Walmart has made a crucial pivot. Instead of selling directly to retail customers the company focussed on selling to small wholesale buyers via the 21 cash-and-carry stores spread across India.