Sponsored By

Update: Walmart closes deal for Flipkart

Agreement thwarts Amazon's growth in India e-commerce market

Russell Redman

May 4, 2018

2 Min Read
Supermarket News logo in a gray background | Supermarket News

This article was updated May 7.

Walmart has finalized a deal to acquire a majority stake in India e-commerce leader Flipkart Online Services Pvt.

Flipkart’s board has approved an approximately $15 billion agreement to sell a 75% interest in the company to a Walmart-led group expected to include Google parent Alphabet Inc. 

Also under the proposal, Flipkart investor Softbank Group Corp. is slated to sell its 20% stake for about $20 billion, according to a Bloomberg report.

With this deal, the U.S. retail giant has thwarted rival Amazon.com Inc., which had reportedly made a bid valued at $22 billion to $23 billion for a 60% share of Flipkart, eclipsing an earlier proposal by Walmart of around $20 billion for a 60% stake. In a sign of the high stakes involved, Amazon offered a $2 billion breakup fee to Flipkart to discuss a deal, published reports said.

“The e-commerce market in India holds tremendous promise. Several e-commerce giants like Amazon and Walmart are leaving no stone unturned to make the most of it. Interestingly, this has led to fresh contention between the retail bigwigs over the Flipkart deal,” Zacks Equity Research said in an analysis released yesterday.

Industry observers note that Walmart holds an edge in the battle due to antitrust concerns. Amazon already is the No. 2 online retail player in India, and regulators might frown on a combination with Flipkart — a situation that may have swayed Flipkart’s board in the direction of a deal with Walmart.

“The combination of Amazon and Flipkart will create a monopoly in Indian e-commerce market, which might not get regulatory approval in India,” Zacks wrote.

As in China, the Indian market is coveted by online retail players. Citing figures from the India Brand Equity Foundation, Zacks reported that the Indian e-commerce market is project to grow from $38.5 billion last year to more than $50 billion this year, reaching $200 billion by 2026.

Fueling the bullish outlook for online retail in India is exploding growth in internet and smartphone use and ongoing digitalization, according to Zacks. That is expected to help propel the online shopping market in India, which is forecast to grow 31% to $135.8 billion in 2018.

Walmart and Amazon, though, will have to face off in the Indian market with another huge online retail player: China’s e-commerce leader Alibaba. Zacks noted that Alibaba already has made sizable e-tail investments in India and is looking to expand further, including in online grocery and food ordering.

 

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like