Walmart, the entire world’s largest retailer, wants in on India’s exploding e-commerce market. On Wednesday, the company announced of which of which’s buying a 77% stake in Flipkart, India’s largest e-commerce startup for $16 billion.
The deal, the largest ever in e-commerce, positions Walmart as a major e-commerce player inside the entire world’s second most populous nation. The company currently runs 21 wholesale stores in nine Indian states, yet so far, India’s tight regulations have prevented of which by selling directly to consumers by itself.
Walmart is usually currently locked in a fierce battle with Amazon inside the United States — of which dominates brick-in addition to also-mortar stores, while Amazon dominates e-commerce. By investing in Flipkart, the company is usually bringing of which battle to India, a country whose e-commerce market is usually predicted to grow to $0 billion in less than a decade, according to analyst firm Morgan Stanley.
Walmart’s investment would likely also give Flipkart, which currently has 40% of India’s online market by sales, according to research firm Forrester, a lot more ammo to fight Amazon, which has pledged to spend $5 billion to win inside the country.
“India is usually one of the most attractive retail markets inside the entire world, given its size in addition to also growth rate, in addition to also our investment is usually an opportunity to partner with the company of which is usually leading transformation of e-commerce inside the market,” said Doug McMillon, Walmart’s president in addition to also CEO. “As a company, we are transforming globally to meet in addition to also exceed the needs of customers in addition to also we look forward to working with Flipkart to grow in of which critical market.”
Flipkart was started out in 2007 in Bangalore by former Amazon employees Sachin Bansal in addition to also Binny Bansal who share a last name yet aren’t related to each additional. The company has been a poster child for India’s startup ecosystem, becoming the first Indian startup to hit a billion-dollar valuation, in addition to also of which employs more than 30,000 people. of which has also been credited with pioneering payment methods like “cash on delivery” in a country where most people don’t own credit cards. Flipkart sells 8 million products through 100,000 sellers in addition to also has 21 warehouses in India.
Unlike Walmart, which focuses on positive margins, however, the company has used the $7.3 billion in funding of which has raised so far to offer deep discounts to shoppers.
Hours before the official announcement, Japan’s SoftBank Group Corp, which owned a fifth of Flipkart, announced of which of which was selling its stake in Flipkart for $4 billion.
Flipkart’s additional investors who are holding on to their stakes include the company’s cofounder Binny Bansal, brand new York–based hedge fund Tiger Global Management, Microsoft, eBay, in addition to also China’s Tencent Holdings.
“of which investment is usually of immense importance for India in addition to also will help fuel our ambition to deepen our connection with buyers in addition to also sellers in addition to also to create the next wave of retail in India,” said Binny Bansal, Flipkart’s cofounder in addition to also group CEO, in a statement. “While e-commerce is usually still a relatively modest part of retail in India, we see great potential to grow. Walmart is usually the ideal partner for the next phase of our journey, in addition to also we look forward to working together inside the years ahead to bring our strengths in addition to also learnings in retail in addition to also e-commerce to the fore.”