How Walmart’s buy out of India’s Flipkart may help it to expand globally

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Updated: May 1, 2018 3:56:03 PM

Walmart may purchase a majority stake in India’s leading e-commerce company for nearly $12 billion and the agreement maybe completed in the next two weeks.

Walmart, Walmart Inc, Amazon, Amazon India, Amazon US, Amazon Prime, Amazon home delivery, Walmart home delivery, walmart delivery serviceIt was in the year 2007 that Walmart first entered India through a joint venture with Bharti Enterprises.(Reuters)

Walmart’s renewed focus to catch up with its competitors across the world is attracting headlines lately. Currently, it’s efforts to acquire majority stake in India’s leading e-tailer Flipkart for nearly $12 billion indicates that the retailer is taking every opportunity seriously to grow its business all across the world. However, the world’s largest retailer hasn’t been this much aggressive traditionally when it comes to its overseas business. Even the much publicised ongoing Flipkart-acquisition talks began two years back in 2016. It was in the year 2007, that Walmart first entered India through a joint venture with Bharti Enterprises.

It was a time when not even Amazon had entered India. However, the joint venture couldn’t sustain and ended in 2013. Thereafter, the company didn’t make much news in the Indian markets due to reasons such as restrictions around foreign investment in physical retail sector in the country.

In 2013, Amazon made an entry in India. The company now owns nearly 27 percent stake in India’s growing e-commerce space, Reuters reported citing Euromonitor. “Walmart has simply been too slow to react when it comes to their overseas business,” said Burt Flickinger, managing director, Strategic Resource Group told Reuters. “They have finally started taking corrective action and are now dedicating their resources to where they think they can grow,” he further told Reuters.

In January this year, Walmart appointed Judith McKenna as Chief Operating Officer to run its global business. The company has since then indicated that it will focus on core North American markets and growth markets like China and India to fix its international business.

Walmart-Flipkart deal

Days back Bloomberg reported  citing sources that Walmart may purchase a majority stake in India’s leading e-commerce company for nearly $12 billion and the agreement maybe completed in the next two weeks. The Bloomberg sources said that Walmart may end up with 60 percent to 80 percent of Flipkart, which will be valued at about $20 billion.

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