Walmart is reportedly in talks to acquire a minority stake in Flipkart, India’s biggest eCommerce company.
According to a report by Reuters, which cited two sources familiar with the matter, Walmart is eyeing the minority stake as a way to get some of the fast-growing online retail industry in India. Walmart is reportedly looking to invest $750 million–$1 billion in Flipkart. The final amount it invests and the size of the stake are dependent on how talks between the two play out, as well as what the overall valuation of Flipkart is. Another option being bandied about is the two collaborating to use each other’s expertise in retail and supply chains.
If Walmart is successful, it would put it in more direct competition with Amazon, which has been expanding its business in South Asia and has become the largest competitive threat to Flipkart in India. “With Amazon slowly taking a lead over the Indian players, all these unicorns, including Flipkart and Snapdeal, are out there in the market to raise funds,” the source said in the report. “Companies like Walmart would be more long-term investors, but there aren’t too many like them to write such big checks.”
The report noted that Flipkart has a value of around $11.5 billion. Earlier in the year, it was valued at as high as $15 billion, but increased competition has knocked its off its perch by a few billion.
Described by Karen Webster as retail’s brewing Rumble in the Jungle, the ongoing faceoff between Amazon and Walmart bears an almost uncanny resemblance to the legendary boxing showdown between Muhammad Ali and George Foreman. Amazon plays the Ali role as the nimble, inventive and infinitely creative challenger, while Walmart slots in nicely for Foreman, a big, powerful incumbent with blows few can stand up to.