US retail giant Walmart is reportedly closing in on purchasing a majority stake in Flipkart, India’s leading ecommerce brand and its most valuable startup.
The predicted deal – which could be worth as much as $20 billion – would give the world’s biggest retailer a 60-80 percent stake in a company that serves a country of 1.3 billion people.
Flipkart’s current investors – which include Japanese robotics and mobile communications giant SoftBank – had reportedly considered a sale to Amazon.
However, Amazon’s status as India’s number two online retailer, and the main rival to China’s Alibaba as the world’s most popular ecommerce platform, would have presented much bigger regulatory hurdles, particularly given the current trade standoff between the US and China and its allies.
Not only is Walmart the world’s biggest retailer, it is also easily the world’s largest company by revenue, in a list that is now dominated by energy providers and Chinese corporations. Out of the US’ mega technology brands, only Apple – the world’s most valuable company – makes it into the same list, at number nine.
Amazon’s moves into automation, AI, the IoT, computer hardware, content, subscription services, deliveries, and a range of vertical sectors have persuaded Walmart that it needs to get smarter, including in its retail heartland.
Internet of Business says
In recent months, Walmart has announced a range of projects which suggest that it intends to take the connected technology fights to Amazon, whose dominance of ecommerce in the US and Europe has pushed Walmart deeper into its traditional corner.
Walmart has recently filed a number of patents in robotics and connected retail applications. These include an item identification system in its stores, as part of a smart shopping cart programme. Another patent is for a customer wearable that logs shoppers into Walmart’s systems when they enter a store, tracks them as they move around, then logs them out when they leave.
The company has also outlined plans for drone assistants, and systems that check the weight of cars when they leave Walmart car parks.
However, many of these moves are about bolstering its in-store experience or securing its supply chain, rather than going head to head with Amazon online and in people’s homes. If completed, the Flipkart deal would give Walmart a massive ecommerce foothold in India, the biggest market outside of the US (in financial terms) and China, where brands such as Alibaba dominate.
Amazon is India’s number two online retailer, and is unlikely to take the move lightly.
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