Walmart has entered in the Indian e-commerce sector and the retail giant has completed the due diligence process on e-commerce firm Flipkart this week. It is looking to control stake of 51 percent in the Indian e-commerce firm Flipkart.
Walmart has already offered a proposal and according to the sources familiar with the matter said, it’s looking to invest $10 billion to $12 million for the stake that would value at roughly $20 billion.
Third source said, “A deal is far from finalized, however. But the talks between the two parties and investors in Flipkart are ongoing”.
According to the reports, A stake in Flipkart would pit Walmart against Amazon.com in India and local media have reported that Amazon is exploring a rival offer for India’s largest home-grown e-commerce player.
As expected previously Walmart is now seeking a bigger stake. Reuters reported in February that it was in talks to purchase a stake of over 40 percent in Flipkart. It is worth mentioning here that it is the same 40 percent, which is backed by the likes of SoftBank Group, Tiger Global, eBay, Accel Partners, Naspers, Tencent Holdings and Microsoft Corp.
Walmart and Flipkart, both declined to comment on this. Reuters Report also says that Bengaluru-based Flipkart, started by two former Amazon employees, is fighting Amazon to grab a bigger piece of India’s massive online retail market. It could be worth $200 billion in a decade,according to Morgan Stanley.
Walmart’s investment would give Flipkart additional funds to fight Amazon. It will also give an extensive experience in retailing, logistics and supply chain management to Flipkart. Walmart has more chances than Amazon. A person familiar with the matter told Reuters that the probability of a Flipkart-Amazon deal was low. Such a deal may spark competition fears as Flipkart and Amazon dominate India’s e-commerce market.
Japan’s SoftBank has invested in Flipkart through its Vision Fund. Now it is rumoured that it may also consider selling a part of its roughly 20 percent stake if Walmart offers a good price. SoftBank last year invested $2.5 billion in Flipkart through prime and secondary share purchases.
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