Walmart to acquire minority stake in Flipkart, compete with Amazon-India
The world's largest retailer, US-based Walmart Stores, is in advanced discussions to buy a significant minority stake in India's leading e-commerce company Flipkart, reported Economic Times. If the deal is finalized, Walmart may pick 15-20% stake in the homegrown e-tailer, said the report. An agreement could be completed and announced by March. Walmart and Flipkart are joining hands to topple Amazon India. Here's more.
Walmart International President-CEO Doug McMillon visits Flipkart
Last week, Walmart International President and CEO Doug McMillon, Walmart eCommerce CEO and Jet.com Founder Marc Lore, and Walmart Chief Operating Officer Judith McKenna, visited Flipkart's office in Bengaluru as part of the ongoing discussions. McKenna is going to take over as Walmart International's President and CEO on 1 February. However, both Walmart and Flipkart did not comment on the matter.
McMillion visited India, confirms Walmart spokesperson
Walmart spokesperson Randy Hargrove said as a company policy, they don't "comment on rumors or speculations". The spokesperson, however, added that President-CEO McMillon was in India to review Walmart's three units - the cash and carry business, global technology centre and global sourcing.
Walmart acquired over 15 start-ups to challenge Amazon
Walmart had been scouting for acquisitions, seeking talent and technology, to become an online leader and overtake Amazon. In Sep'16, Walmart acquired Jet.com for $3bn; before this, it bought as many as 15 start-ups in five years. In Jan'17, Walmart joined hands with Japanese e-tailer Rakuten, the maker of Amazon Kindle rival "Aura" e-reader, to sell the e-readers in its stores and online marketplace.
Walmart, Flipkart could attract more buyers using Jet.com's pricing technology
India remains an important market for e-commerce players, where Amazon is increasing its investment to $5bn while Flipkart would spend about $2.5bn. The Walmart deal would be significant for Flipkart as it may give the Indian e-tailer access to Walmart-owned Jet.com's pricing scheme technology, the website's popular feature. Jet.com could help Walmart and Flipkart lower prices to reach more customers and challenge Amazon.
Deal could help Flipkart's push into grocery
Experts say the Walmart deal may also give a significant boost to Flipkart's push into the grocery space -where 100% foreign direct investment (FDI) is allowed- in both online and offline channels. The Bengaluru-based e-tailer has been focusing on food and grocery business and a partnership with Walmart, which is well experienced in the grocery sector, could be a game changer.
India is an exciting and priority market: Walmart
"For Walmart, India is an exciting and priority market. Walmart is deeply committed and proud of creating shared value for local communities, kiranas, small farmers, and our local supplier partners in India," stated a Walmart spokesperson, according to the ET report.
