Walmart's New Foothold in India Has as Many Customers as Amazon Prime

Walmart's New Foothold in India Has as Many Customers as Amazon Prime

Walmart's New Foothold in India Has as Many Customers as Amazon Prime

Wal-Mart Stores Inc. today announced that it has struck a massive $16 billion deal to acquire a majority stake in Flipkart Group, the leader of the increasingly important Indian e-commerce market.

Amazon was also said to have put in an aggressive offer to buy 60 per cent of Flipkart but the board of the Indian firm is said to have favoured the Walmart offer.

"India is one of the most exciting markets in the world", says Bob van Dijk, Naspers group CEO.

Today, Indian e-commerce industry is already close to Dollars 30 billion in size and analysts expect this to zoom to USD 200 billion by 2026.The growth of the sector was comfortably in sync with the meteoric rise of Flipkart.From a modest two-bedroom apartment in Koramangala, the Bengaluru-headquartered company now has multiple offices across the country.

Bentonville, Ark. -based Walmart noted that the Flipkart investment transforms its position in a country with more than 1.3 billion people, robust GDP growth, a rising middle class and "significant runway" for further smartphone, internet and e-commerce penetration.

"We now have 21 stores and plan to open 50 stores in 4 to 5 years". Both had repeatedly declined to comment on the talks.

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But in the holiday quarter, US online sales growth slowed considerably and the company said it would shift some resources away from jet.com to walmart.com, a disappointing turn of events that could help explain investors' anxiety about the Flipkart news.

Walmart's acquisition of Flipkart should not face any policy hurdles in India as the e-commerce major runs a marketplace in which 100% foreign direct investment is allowed.

He started his career with an IT firm Techspan in 2005 and then joined Amazon Web Services in January 2006. Walmart said Wednesday that it expected the deal to cut into earnings per share by 25 to 30 United States cents in the current fiscal year and about 60 USA cents in the year after that. The companies said Flipkart will leverage Walmart's omnichannel retail know-how, grocery and general merchandise supply-chain acumen, and financial muscle, while Walmart will benefit in India and globally from Flipkart's talent, technology, customer insights and innovative culture. The transaction is expected to close later this year and will be subject to regulatory approvals. Flipkart registered 20 shipments in the year of its debut. Satish Meena, Senior Forecast Analyst at Forrester Research, said while Walmart can utilise its sourcing and retail prowess to aid Flipkart's efficiency, it still needed to come up with a product that can match Amazon's Prime loyalty programme. It now operates 21 such stores in India.

In 2015, a unit of conglomerate China Resources Corp plans to sell minority stakes it holds in 21 Wal-Mart Stores Inc WMT.N. outlets around China for $525 millihere.

Flipkart rejigged its management and Binny took over as CEO.

The Confederation of All India Traders, which represents thousands of small businesses, has written to the government urging it to block the deal.

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