eCommerce,
WalMart,

Walmart Buys 77% of Flipkart for $16B

May 11, 2018

flipkart home page may 2018

Walmart has outbid Amazon for a $16B stake in India’s e-commerce giant Flipkart. Flipkart’s board has approved the deal to sell a 77% stake of the company to Walmart.

Flipkart, India’s biggest online store, was founded by two former Amazon employees in 2007 — Sachin Bansal and Binny Bansal (who are unrelated). Flipkart is a dominant player in the Indian eCommerce market, going head to head with Amazon, but has struggled to make a profit.

The battle for one of India’s highest valued startups (at $20B) began a year ago when both Walmart and Amazon expressed interest in the company.

The purchase gives Walmart inroads to the enormous Indian market, which it has been trying to access for years. Local regulations restrict Walmart from operating wholesale outlets in that country. It also increases Walmarts presence overseas and helps it build its reputation as an online retailer.

Walmart will make $2billion worth of investment into Flipkart, as one of the parts of the deal. It may also bring in additional potential investors, while still retaining a majority stake.

The majority stake in Flipkart helps the worlds largest retailer gain significant ground against Amazon. Flipkart’s strong presence in sectors such as fashion, electronics, and digital payments were major factors behind Walmart’s decision to buy the company.

The deal is subject to regulatory approval in India.

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