It is anticipated that during the latter half of this week, Walmart will declare that it is purchasing a majority share in Flipkart, the Indian company, working in the field of e-commerce. Notably, Walmart is going ahead with this in spite of the reported efforts of Amazon to interrupt this deal.
The first discussion regarding this happened between Flipkart and Walmart in 2016 and now as reported by various media agencies, Walmart has concurred to buy 75% share of Flipkart at a price of $15 billion or £11 billion.
Amazon, the major competitor of Flipkart, besides trying to interrupt this deal between Flipkart and Walmart, had also tried to purchase Flipkart by bidding.
Although Flipkart has been suffering losses, they have managed to draw in some huge investors like Softbank, Tencent and Microsoft. Flipkart has a user base of 100 million registered customers and it gives out close to 8 million shipments every month.
The reason behind the interest of Walmart in this deal is probably due to the fact that by some predictions, India is the upcoming major market in the field of e-commerce and this market is assumed to grow by nearly 1/3rd and reach a level of $50 billion.
Walmart’s head of investor relations, Brett Biggs, stated at a conference that China and India have the major potential to be huge growth markets for Walmart due to the fact that more than 33% of the world population resides in these two countries and hence they continue to be very important chances for Walmart.
Right now, Walmart is running 21 wholesale shops in India. Previously, Walmart had ended up violating Indian laws concerning foreign ownership in this sector of retail and had also seen a failed joint initiative in 2013.
Any comment from Walmart regarding the Flipkart deal was declined.