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.
"We are actively working to shape the portfolio of geographies and businesses we're in, in order to set the company up for success for another generation", Walmart CEO Doug McMillon said during a conference call Wednesday. More importantly, it intensifies the battle between Walmart and retail giant Amazon in the emerging Indian e-commerce market. Sources tell the publication that Walmart and other investors see better stability under the leadership of Binny and Kalyan.
While Naspers has not divested from India, it has also not fully divested from Flipkart or for that matter, Walmart. This is the largest e-commerce deal anywhere in the world.
"If there's one thing we can learn from the recent Flipkart saga, it's this: never count out Walmart". However, it is still early days to assess the net gain for Walmart as it is in an experimental mode to win a share of Indian online retail market through Flipkart. The Bansals, likewise, would be wiser, getting some knowledge about how to sell groceries online, something rival Amazon is betting big on. The deal was greeted with some amount of skepticism on Wall Street with Walmart sharEs down by 4%.More news: Qualcomm will launch new processor for wearables this fall
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For a long long time, the neighbourhood Sharmaji, and the whole ilk of media and business analysts believed that IPO is the only way to make a successful exit for a company in India.
Interestingly, Amazon had been considering making its own offer for the Indian firm as well, but it looks like Walmart beat them to it.
"This deal with Walmart can provide Flipkart the expertise of running offline stores, access to sellers and manufacturers, supply chain and the know-how to get into the grocery segment".
"This may seem like a one-off acquisition in a faraway land, but Indian e-commerce is without a doubt going to be a focus for Walmart". Rs 1,04,000 crores is the investment Walmart kept in to acquire the major stake in Flipkart.
Flipkart's sales grew more than 50% in its most recent fiscal year to $4.6 billion, Walmart said, compared with $11.5 billion for Walmart's US e-commerce business.
Amazon's arrival into the deal deliberations a month later in December 2017 did not make much of an impact as the Flipkart founders and its investors felt the Competition Commission of India would block any possible deal between the two competitors.