To become the biggest investor in India’s leading e-commerce company, Walmart Inc. is planning to pay out a whopping amount of $ 7 billion in Flipkart. In the online retail market, this move would ultimately raise a huge competition with Amazon.com.
Arkansas based retail giant, The Bentonville has proposed to buy a third portion of Flipkart.com. People even said that it will purchase stocks from SoftBank Group Corp., and Tiger Global Management. The agreement may put the valuation of hometown group from $12 billion to about $20 billion. The meetings are at their peak and there are chances of being materialized by this month end only. Though, it is possible that the valuation or stake size may alter, which could even result in disagreement of the deal.
Talking about the other side, if the deal would materialize then it will give Walmart a major stake in this rapidly increasing E-commerce market. Undoubtedly, right from the beginning, it has struggled a lot against one of the biggest E-commerce giants, Amazon. After U.S. and China, India is the next largest market where international retailers have made slight progress against Alibaba Group.
In case, if Walmart would back, then it will fortify Flipkart. However, Jeff Bezos, the founder of Amazon has promised to invest around $5.5 billion in India. Both Flipkart and Walmart made no comment.
Walmart, however, is still in talks about its stock purchase, people further added. Even, SoftBank wants to retain a significant stake in Flipkart Offers and don’t want to give much of its current shares. The company has made over $100 billion of its investment in Alibaba. Coming to Tiger Global Management, it would like to hold a small stake in Flipkart after Walmart comes in. It is even estimated by few people that Flipkart could share new shares as Walmart takes its stake.
Currently, both SoftBank and Tiger are the largest shareholders and followed by South Africa’s Naspers Ltd. According to the reports, Walmart’s entry into Indian E-commerce business would represent a strict competition between Amazon and Walmart. As far as customers’ viewpoint is concerned, the rivalry between the two would lead Indian consumers to enjoy better offers, discounts, and deals.
There is no denying of the fact that the year 2017 was somewhat great for Indian e-commerce industry. However, in 2018 the things could be better with the competition between Flipkart and Amazon.
In a recent report, named, India’s Digital Leap-The Multi Trillion Dollar Opportunity, Morgan Stanley stated, ‘with the increasing number of E-commerce customers will surely help market to grow up to 12 percent in the near future.