Considered to be a major proponent of the deal, Walmart
is looking at Flipkart
as a partner not just to combat rival Amazon
in the e-commerce
space, but also as a way for it to make inroads into India’s underpenetrated offline retail market.
Sources privy to information of the deal confirm that Walmart
is pushing to acquire 51 per cent stake in Flipkart
over a period of time. The deal will provide exits to several of the company’s early investors such as Accel Partners, Tiger Global, Naspers
and IDG Ventures.
Other experts also say that with such a large commitment in India, the US giant isn’t going to merely focus on winning the five percent of India’s overall retail market that e-commerce
currently makes up. There’s still a lot of headroom for large format offline retail to grow in India over the next 20-30 years and is squarely something that Walmart
This would mean Flipkart
won’t be going up against just Amazon
or Paytm anymore, but also behemoths such as Reliance, Tata, Future Group and D-Mart
among others. For Flipkart, the deal could fundamentally restructure the company from being an online player
to being a retailer that sells both online and offline.
“It makes sense for Walmart
to take majority stake in Flipkart
because they’re looking at them as a partner to get access to India’s retail market, not just the e-commerce
already has some of the best practices when it comes to sourcing and picking right store locations, etc, and their entry into Indian retail will be huge,” says Harminder Sahni, founder and MD at Wazir Advisor.