A controlling stake in Flipkart would mark Walmart's biggest acquisition of a business in recent years Walmart Inc.
is expected to announce its a deal today to buy controlling stake in India's top online retailer Flipkart, in what is likely to be the retail giant's biggest acquisition of a business in recent years.In buying Flipkart, Walmart would seek to redress missteps in China, where it initially bought an unprofitable, second-tier online marketplace, then exchanged it five years later for a stake in JD.com, the number-two player behind market leader Alibaba Group Holding Ltd.
The strategic shift forced Walmart to play catch-up in the world's biggest e-commerce market, and Chief Executive Officer Doug McMillon doesn't want to miss the opportunity before him in the world's second most-populous nation."They missed the boat in China, and they don't want to make the same mistake in India," Robert Gregory, global research director at consultant Planet Retail RNG, said by phone.
"It's quite clear that the future of markets like China and India are online.
If Walmart wants to play in India, it has to invest."The Flipkart investment could be Walmart's biggest deal in almost two decades and strike a blow against rival Amazon.com Inc., which holds 27 percent of India's $30 billion e-commerce market, according to data tracker Euromonitor.
Amazon's market share trails Flipkart's 34 percent.
The online retailer has committed $5.5 billion to expand its business in India, where it's built a new mobile app and is pushing into new areas like groceries just as it has in the US.The Flipkart Group includes fashion portals Myntra-Jabong, payments unit PhonePe and logistics firm Ekart.
Sachin and Binny Bansal, both former Amazon.com employees, founded Flipkart in 2007, and like their US rival, began by selling books.Flipkart will hold a townhall for employees on Friday, which the Walmart CEO is likely to attend, says Reuters, quoting sources.Walmart has tapped India and China as its two main growth markets abroad.
Despite its progress in China, Walmart's resigned to playing second fiddle there to Alibaba.
In India, it has a chance to flip the narrative and be No.
1.