Asia Pacific

Walmart takes control of India’s Flipkart

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The $16bn payment will make the US company the largest shareholder in India's leading online retailer, reports Tina Nielsen

Together, Walmart and Flipkart will create India’s leading e-commerce platform. The American retailer’s investment includes $2bn of equity funding, which will spur the growth of Flipkart.

Founded in 2007, Flipkart has grown to be the leading player in the Indian e-commerce market – ahead of Amazon – with 54 million active users and 261 million units sold in the last year. Using new technology such as artificial intelligence, it has established itself in electronics, large appliances, fashion and apparel.

In what is seen as a mutually beneficial agreement, Flipkart will leverage Walmart’s omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while Flipkart’s talent, technology, customer insights and agile and innovative culture will benefit Walmart in India and across the globe.

Market potential

India is one of the world’s largest and fastest growing markets. The country’s e-commerce sector is expected to grow four times as fast as the total retail sector through 2023. Add to this a growing middle class with rising spending power and a Millennial population of 443 million.

“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of e-commerce in the market,” said Doug McMillon, Walmart’s president and chief executive officer. “As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market.”

Walmart will be working with Tencent, Tiger Global and Microsoft, who will be key strategic and technology partners. “We are confident this group will provide Flipkart with enhanced strategic and competitive advantage,” says McMillon. “Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.”

Supporting small businesses

Walmart says the investment will contribute to India by creating jobs, supporting small businesses and farmers as well as develop new supply chains through local sourcing and improved market access. It also highlights the ambition to reduce food waste by improving waste management practices and investing in supply chains, especially cold storage.

Binny Bansal, Flipkart’s co-founder and group chief executive officer, said the investment is important for India. “It will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India,” he said. “While e-commerce is still a relatively small part of retail in India, we see great potential to grow. Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learnings in retail and e-commerce to the fore.”

Tina Nielsen

 

Pictured: Doug McMillon, president and chief executive officer of Walmart and Binny Bansal, co-founder and group chief executive officer, Flipkart