In one of the world’s largest ever ecommerce deals so far, American retail giant Walmart announced its acquisition of Bengaluru-based Flipkart by paying $16 billion for an initial stake of 77 percent in the company. With Walmart’s acquisition of Flipkart business experts are claiming that the battle for supremacy in the Indian ecommerce industry is certainly going to enter into an interesting phase with Amazon already made its presence felt in the country.
Doug McMillon, Walmart’s president and chief executive officer in a statement said, “India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of ecommerce in the market. As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market.”
According to Bloomberg, Morgan Stanley has estimated that India’s ecommerce market will increase to $200 billion in about a decade from now. The deal will certainly boost the supply chain infrastructure in India along with an opening of large number of jobs in the market.
Over the past two decades, Walmart and Amazon have always been bitter competitors in the US market and although Walmart remains the largest retailer worldwide – it has struggled to make their ground strong in the ecommerce industry. In 2016, Walmart’s interest in investing in Flipkart was first reported in India. The company estimated that India’s online shopping will grow by 36 percent per year over the next five years which is almost four times faster than the retail market.
On the other hand Binny Bansal, Flipkart’s co-founder, and group chief executive officer stated in his official statement, “This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India.”
He also added, “While ecommerce is still a relatively small part of retail in India, we see great potential to grow. Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learning’s in retail and ecommerce to the fore.”