Walmart wins battle for India's Flipkart

Flipkart Chart3

United States retailer Walmart has finally moved in to take over Flipkart's business in the country after settling on a 77 percent stake acquisition of the latter in a deal that's worth $16 billion. "We continue to stay invested and growing in this market for now".

According to industry experts, it could use its Best Price stores as pickup and delivery points to service online sales made on Flipkart. Pratap and his co-founders have built the technology that powers much of the gifting and gift-card solutions used by India's largest retailers. It is also touted that Jack Ma's Alibaba Group also intends to become the third player in India, making the diversity in choices apparent.

This feels like a watershed moment for Indian e-commerce.

Walmart closed 60 stores in Brazil, 10 percent of its outlets, two years ago and is trying to restructure its business.

"The deal indicates attractiveness of India's consumption market for global majors. we expect greater thrust on the online grocery segment", said rating agency Crisil Research director Ajay Srinivasan in a statement here. By buying 77% stake in Flipkart Group for $16 billion, Walmart valued the company at about $21 billion.

"The deal will help Flipkart to grow aggrasively in India and can give a tough fight to other leading e-tailers such as Amazon and Snapdeal". There will be an uneven level playing field to the disadvantage of retail traders. "Flipkart Singapore also operates Flipkart Malaysia, Flipkart Middle East, and other companies outside India".

"The owner can dictate anything".

"A company like Walmart shown interest only after they smelled huge business opportunities in the Indian e-commerce market through Flipkart". That was the second largest deal in the consumer internet space in India, behind Flipkart's acquisition of fashion e-tailer Myntra in 2014. The association of India asked the government to take strong steps to ensure adherence to FDI policy. Then, the e-commerce company launched logistics arm Ekart.

"A regulatory authority should be constituted by the government which should scan the details of Walmart-Flipkart deal and it should be scrutinised from different angles like competition and cyber security, predatory pricing, deep discounting and loss funding", CAIT Secretary General Praveen Khandelwal told PTI.

The investment will help accelerate Flipkart's mission to transform commerce in India through technology and underscores Walmart's commitment to sustained job creation and investment in India. Reuters has reported Google-parent Alphabet may buy a roughly 15% stake in Flipkart for $3 billion.

Upon completion of the transaction, Walmart will work closely with the remaining shareholders in Flipkart that include Tencent Holdings and Microsoft, who will be able to provide key strategic and technological insight for the company moving forward.

Another Accel portfolio company, US-based ed-tech firm Lynda.com, was acquired by social networking platform LinkedIn at a valuation of $1.5 billion.

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