Walmart Stores Inc, the world's biggest retailer, is in advanced talks to acquire a minority stake in India's leading e-commerce marketplace Flipkart, the Economic Times reported, quoting two people with knowledge of the development. A deal could be finalised by March, they said.
Walmart could acquire a 15-20% stake in Bengaluru-headquartered Flipkart, the main challenger to U.S.-based e-commerce giant Amazon, which is in the process of setting up operations in India. The
Economic Times report said the deal may involve primary and secondary sales by some longstanding investors.
A Reuters report on the potential deal between Walmart and Flipchart said that last year, Japan’s SoftBank Group invested nearly US$2.5 billion in Flipkart through both primary and secondary investments. Flipkart also secured US$1.4 billion from China’s Tencent, online marketplace eBay and software giant Microsoft.
No official comment
SoftBank owns roughly a fifth of Flipkart, while U.S. hedge fund Tiger Global Management owns a stake of slightly less than 20 percent, a source told Reuters.
Spokesmen for Flipkart and Walmart declined comment, saying the firms do not respond to market rumors or speculation, but the Economic Times reported that then Walmart chief executive officer
Doug McMillon led a delegation that visited Flipkart's Bengaluru office in late January. The other members of the team included Walmart e-commerce CEO Marc Lore, founder of Jet-.com that was
acquired by Walmart in 2016, and Judith McKenna, who since February 1, has taken over as president and CEO of Walmart International.
Amazon's main rival in India, Hangzhou-based e-commerce giant Alibaba and its payments affiliate Ant Financial has a combined shareholding of 62% in Paytm Mall, as well as a less than 5% stake in Delhi-based online marketplace Snapdeal.
If the link-up with Flipkart is successful, it will put Walmart directly in competition with rivals Amazon and Alibaba for a share in the Indian digital commerce market, which is expected to grow to US$69 billion by 2020.
Nol van Fenema