How Walmart-Flipkart deal will be a game-changer in the Indian e-commerce industry

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Walmart is reportedly closing in on a big acquisition of Flipkart, and if it happens, India’s retail market could face a major upheaval soon.

According to Bloomberg, Walmart hopes to acquire a controlling interest in Flipkart for US $12 billion or more and announce the agreement in as many as two weeks. Bloomberg, which cited sources in its report, said that the entire Flipkart board has signed on to the investment. If Walmart can clear a few more hurdles to get the deal done, the company could soon be a prominent player in India’s exploding retail market.

The much publicised ongoing Flipkart-acquisition talks began two years ago in 2016, but picked up the pace when Walmart Global CEO, Doug McMillon, visited India in January 2018 and spent time at Flipkart’s Bengaluru office.

“For Walmart, India is an exciting and priority market. Our Global CEO Doug McMillon was in the country for India Business Review for its all three entities – India Cash & Carry business, Global Technology Centre and Global Sourcing,” a Walmart India spokesperson was quoted by PTI as saying.

The spokesperson added that the company is “deeply committed” to the Indian market.

A deal with Walmart could help SoftBank-backed Flipkart to not only add financial muscle but also strengthen supply chain and enhance efficiency in procurement and product assortment.

For Walmart, the investment would allow the company to grab a foothold in India’s booming e-commerce industry that is estimated to touch US $33 billion this fiscal. With investment from large corporates like SoftBank and potentially Walmart, if the deal happens, Flipkart will have more firepower for its battle with US-based Amazon.

If the deal between Walmart and Flipkart materialises, the war between Amazon and Walmart would spill over into India, the fastest growing market for the Jeff Bezos founded company.

This potential investment will benefit the consumer from the increasing competition on the dual dimensions of convenience and value.

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