Walmart May Take On Amazon In India With Flipkart Investment

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Walmart may take on Amazon in India with a direct investment in Flipkart, Reuters reported Friday, citing people familiar with the company's plans. The largest employer in the United States is said to be mulling over taking a stake in India's e-commerce giant and is supposedly interested in acquiring over 40-percent of Flipkart. The negotiations between the two are understood to have been ongoing for a while now, with Walmart reportedly planning to start doing its due diligence as soon as next week. The Bentonville, Arkansas-based company already has a presence in the South Asian country in the form of a wholesale business spanning 21 brick-and-mortar stores. While previous reports indicated the firm has been looking to expand to e-commerce, local regulations wary of foreign investments are said to have kept it away from making a move in that segment so far.

Taking a stake in an established e-commerce platform would hence be easier than launching one under its own brand for Walmart, some industry watchers believe. Flipkart was valued at $12 billion last August when SoftBank's vision fund acquired approximately a fifth of the firm for $2.5 billion. The Japanese conglomerate offered to buy additional shares in November but at a discounted valuation amounting to $10 billion. Should Walmart's investment materialize, the company may hence end up paying in the ballpark of $5 billion for such a major stake in Flipkart, thus becoming its largest shareholder. The insiders cited by Reuters suggested the valuation may even surpass $12 billion, without elaborating on the matter. E-commerce platform eBay and China's tech giant Tencent have smaller stakes in Flipkart, as do Microsoft and New York-based investment firm Tiger Global Management.

In addition to providing Walmart with a long-sought presence in India's online retail segment, the move would deliver additional backing to Flipkart that's been fiercely competing with Amazon in recent times. The Seattle, Washington-based conglomerate sees the country as one of its largest foreign growth opportunities, having previously invested in a wide variety of e-commerce ventures and other projects in India. It's presently unclear whether a deal between Walmart and Flipkart would face any significant opposition from New Delhi's antitrust watchdog.

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Dominik started at AndroidHeadlines in 2016. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]

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