Walmart Inc. has become the largest shareholder by signing agreements with India’s e-commerce company Flipkart. “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,” Doug McMillon, Walmart’s president and chief executive officer said.
The investment will not only help accelerate Flipkart’s customer-focused mission to transform commerce in India through technology but also underscores Walmart’s commitment to sustained job creation and investment in India, he added.
Walmart will pay approximately 16 billion US Dollar for an initial stake of approximately 77 per cent in Flipkart, subject to regulatory approval in India. The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.
Flipkart, founded in 2007, has led India’s e-commerce revolution. The company has grown rapidly and earned customer trust. “This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India,” Binny Bansal, Flipkart’s co-founder and group chief executive officer 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.”
While Walmart and Flipkart will leverage the combined strengths of both companies, they will maintain distinct brands and operating structures.
In the fiscal year ended March 31, Flipkart recorded GMV of 7.5 billion US Dollar and net sales of 4.6 billion US Dollar representing more than 50 per cent year-over-year growth in both cases. With the investment, 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, Walmart said in a statement.
– Apparel and Textile News, Apparel Talk, Indian Apparel
