Walmart Buys Flipkart in Biggest Global Ecommerce Deal

The Bentonville, Arkansas-based retail behemoth Walmart Inc yesterday announced acquisition of 77 per cent stake in Flipkart for about Dollars 16 billion in its biggest deal till date.

A minority stake in Future Group will be sold to a strong global retailer, Biyani told a leading business daily.

The Flipkart-Walmart deal, entrepreneurs and investors hope, will be the trigger for domestic companies to look deeper into India's internet ecosystem, including at financial technology, health technology, and artificial intelligence businesses. (AMZN) in one of the world's fastest growing online retail markets, according to CNBC.

"The Indian Government would have to relook, and consider opening up foreign direct investment in multi-brand retail", it said.

"This is a big wake-up call for large Indian corporate houses". However, they have not had as disastrous an impact on small retail shops as feared. Founder Jeff Bezos has promised to pump in more than Dollars 5 billion to win the Indian online retail market.

Walmart's buyout of Flipkart is expected to close by the year-end, the USA retailer had said in a statement.

"The intent should be to benefit the offline market in accessing capital and enabling homegrown conglomerates such as Tata Group to bring new global partners into India, and, global offline retail majors, such as Carrefour Group", it said.

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The CPI-M said it was common knowledge that Walmart sourced its products from worldwide markets and now these will be sold in India, further destroying the small scale and medium scale sector which is the largest provider of employment after the agricultural sector.

WalMart "will be able to embrace a Phygital approach in India", it said.

"Given its plan to add 50 new stores in India over the next 4-5 years, Walmart and Flipkart would be in the pole position to potentially win the race against Amazon", it said.

Flipkart founder Sachin Bansal has made the shocking decision to leave the ecommerce company.

"Therefore, being the controller of the company, Walmart may use the data and other information as per its will and wish and the possibility of compromising the data cannot be ruled out", he said, according to the statement.

"We do not perceive the deal as negative for listed physical retailers". This relationship could also get a boost with the Flipkart acquisition, said CMR.

Flipkart says it has 1.6 lakh sellers on its platform. In a note to clients, Stifel analysts led by Mark Astrachan provided some additional perspective on the battle between Walmart and Amazon.

(Copyright © 2015. All Rights Reserved.)
 
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