Walmart CEO Doug McMillon (L) and Flipkart co-founder and CEO Binny Bansal shaking hands at an event in Bangalore, as a deal was announced for Walmart to buy a stake in Flipkart.Source: / AFP PHOTO / WALMART

India’s e-commerce battlefield heats up with Walmart’s entry

THE e-commerce market in India is worth billions. Last year, according to figures released by Forrester, the online retail market in the country grossed up US$21 billion.

Up until yesterday, the country’s e-commerce battlefield witnessed the intense competition between Amazon, an American giant and India’s own Flipkart.

However, recent news reports have revealed that Walmart, another American retailing giant, has gobbled up a controlling stake in the Indian e-commerce company co-founded by entrepreneurs Binny Bansal (pictured above) and Sachin Bansal.

Walmart has purchased a 77 percent in Flipkart for US$16 billion, valuing the company at more than US$20 billion. Reports also suggest that the US retailer insisted on having only one of the founders on board, so Sachin Bansal will be bidding farewell to the company he has been building since October 2017.

Flipkart truly upheld audacity and customer centricity and I got to work with the best people. We took on some of the…

Posted by Sachin Bansal on Wednesday, May 9, 2018

Flipkart has had its fair share of challenges over the past few years despite being a hit among Indian consumers. The company, according to Bloomberg reports, had wiped off half of the US$6.1 billion injected into it since inception. And that’s exactly why analysts believe Walmart’s investors are beginning to write off the Flipkart investment.

However, Walmart is said to have made the investment despite the near-term revenue challenges as the “long-term opportunity in a country with a population of 1.3 billion was too large to ignore”.

Interestingly, Amazon had been considering making its own offer for the Indian firm as well, but it looks like Walmart beat them to it.

What this means for India’s e-commerce market is that there is going to be more competition in the coming days as Amazon attempts to secure its turf and guard it against Walmart, while the latter tries to establish its presence with new strategies, tactics, and its experience in other markets.

Walmart isn’t new to India. It’s been in the country for almost a decade now, although it hasn’t participated in the online retail boom or even opened a swanky signature store in the country. This investment definitely opens new doors for the company in India.






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