Walmart May Invest in E-Commerce Giant Flipkart
Walmart May Invest anywhere between $750 million and $1 billion into India’s Largest E-Commerce Site Flipkart.
In the last week of September 2016, Fortune.com reported that Wal-Mart Stores is in talks to buy a minority stake in India’s largest e-commerce firm Flipkart, as the world’s biggest retailer aims to get a slice of a fast-growing online retail market.
One of the sources said the U.S. retailer was looking to invest between $750 million and $1 billion in Flipkart, but the final value and size of the stake would depend on the outcome of talks about the Indian company’s overall valuation.
Walmart and Flipkart were also contemplating a collaboration that would see them leverage each other’s expertise in retail and supply chains in India.
A deal would pit Walmart against U.S. rival Amazon, which has been expanding rapidly in the South Asian country’s retail market and is now Flipkart’s biggest competitor. Walmart only operates wholesale stores in India.
Recently, Flipkart has been valued at about $11.5 billion. The company was valued at as much as $15 billion earlier this year, but cut-throat competition, reduced private funding, and elusive profitability have put pressure on e-commerce players in India.
Launched in 2007 by two former Amazon employees, Flipkart sells everything from cellphones to suitcases and cosmetics. Current investors include Tiger Global Management and Accel Partners.
Flipkart and smaller rival Snapdeal have been looking to raise fresh capital to compete with deep-pocketed Amazon in an industry that relies on steep discounts on products and heavy spending on marketing, technology and delivery networks to lure customers.
India’s Economic Times newspaper, which first reported the talks on Tuesday, said a meeting between the two sides was scheduled for this week.
In any case, companies around the world are joining forces with the likes of 4x Buyer Protection and Shopper Approved as they look to improve the way they do e-commerce in an attempt to increase their customer base and profit potential.