What the Flipkart-Walmart deal means for e-commerce in India

What the Flipkart-Walmart deal means for e-commerce in India

What the Flipkart-Walmart deal means for e-commerce in India

Praveen Khandelwal, secretary general of the Confederation of All India Traders (CAIT), was more assertive in his views on the adverse impact of the deal on small retailers.

Putting up a fearless face, Biyani said to the newspaper that Future Group has a lead over other retailers in the country and he can shore up his company's strength as India played host to the world's biggest e-commerce deal.

Walmart's press release alluded to the possibility of other investors reducing its stake.

The SJM's letter to the prime minister, asking him to ensure that interest of those at the bottom of the pyramid in retail and agriculture space are safeguarded, came on a day Walmart Inc acquired 77 per cent stake in Flipkart.

Flipkart will get additional capital and expertise to battle Amazon, which has spent billions of dollars to gain customers in the country. Walmarts Krish Iyer will be the CEO of the Bengaluru-based firm.

Walmart's acquisition of Flipkart should not face any policy hurdles in India as the e-commerce major runs a marketplace in which 100% foreign direct investment is allowed.

Last year, Kalyan Krishnamurthy, previously an executive in Flipkart investor Tiger Global, took over as Flipkart CEO.

He said SoftBank's $2.5 billion (roughly Rs. 16,800 crores) stake in the company would be worth $4 billion (roughly Rs. 27,000 crores) with the acquisition.

Just hours after the Walmart-Flipkart deal was announced, US-based ecommerce major eBay said it had notified Flipkart and Walmart about its intention to sell its holdings in the former, which would give it gross proceeds of approximately $1.1 billion.

Overall, if we combine these three factors, then this acquisition of Flipkart by Walmart is a gamechanger for the entire industry, and all stakeholders - entrepreneurs, ecosystem and the customers.

Amazon boss Jeff Bezos has committed more than $5 billion to grabbing a big slice of India's e-commerce pie after failing to make inroads in China.

Only 14 per cent of its over 400 million Internet users shop online and the number is projected to rise to over 50 per cent by 2026.

"I see the competition getting more aggressive as Amazon counteroffers Walmart for a stake in Flipkart".

SoftBank acquired its stake in the company a year ago through its Vision Fund investment arm. It could potentially use those Best Price stores as pickup and delivery points.

Walmart said on Wednesday it reached a $16 billion deal to buy a majority stake in Flipkart, India's leading e-commerce platform, in a sizable bet on a vibrant but risky new market.

The deal, which wiped away $10 billion of Walmart's market capitalisation as investors reacted negatively in early morning trade on the New York Stock Exchange, stands out for several exits. "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".

Steuart Walton, the grandson of Walmart founder Sam Walton, is likely to join the board of Flipkart, said a person familiar with the development.

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