The recent livemint report on Walmart vying for a stake in Indian e-commerce company: Flipkart (and it’s sister business arms: Myntra, Jabong, eBay India and PhonePe wallet service).
The company is ready to buy as much as 40 percent stake in the India business scene. Walmart has its eyes set on the Indian retail sector since quite long but the government of India has strict guidelines on inviting offshore investors. The USA major has been trying to serve the nation with its unique business values. The company gained entry into India’s business to business retail segment. Since its bittersweet days with the Bharti came to an end, Walmart had no other partner to bade it well.
Why only Flipkart?
- For a long time now, Flipkart and Amazon have been at loggerheads over indian e-commerce share.
- Both the companies have used varied tactics. Additionally, Flipkart has gained investors attention by standing tall against the global Goliath.
- New investors are ready to pool in money (at a higher stake) as Flipkart has displayed a keen understanding of Indian market and
against Amazon, which has been instrumental in making this book seller turned multitasking organization into the best.
- The biggest asset is seen in form of long term potential. Investors are ready to explore the niches (nooks and corners of the nation) to gain high returns.
- The race doesn’t end here. Grapevine has it that the Google is also ready to take Flipkart as it’s bandwagon to get customer attention. Earlier in 2016, both Walmart and Google tried to woo the Flipkart but sadly deal couldn’t see the light of the day.
- For walmart, India is a land of varied opportunities with its multivariate avenues for growth and development. Flipkart can gain effectively from the competitive prices. This means as a customer, better deals await around corner from the deal.
- Already on an acquisition spree, Walmart acquired Jet.com and merged 15 other such ventures to get better ammunition to get to the top.
- On a close fight with Amazon, Walmart has been keen to combine synergies with the Indian giant.
- SoftBank Group invested $ 2.5 million into the Flipkart last year but is not happy with the deal. It owns one fifth of Flipkart but tencent owns 20 percent stake in the company.
- The reason for the SoftBank Groups dilemma lies in the fact that it had planned to gain long term benefits with the Flipkart.
- Although Walmart had a stable revenue structure, this partnership deed will give both the companies an edge over the giant Amazon. Even though Amazon and Walmart cater to different customer bases yet both of them are considering the goal to gather attention of indian customers to the maximum.
Like a Hindi movie, the climax of the deal yet to be seen. However, if the deal falls into place then the Flipkart will have more ammo to give you services and discounts. As a long term association, Walmart and Flipkart will give better value for money to cater to the burgeoning inflation.