Walmart all set to acquire ~70% stake in Flipkart
SoftBank and Flipkart founder Sachin Bansal are expected to sell their entire stake in the e-commerce firm.
This deal will bring the valuation of Sachin Bansal founded Flipkart to US$21bn. Walmart had already completed the required procedures to acquire the Indian e-commerce player in mid April.
Japan’s SoftBank, meanwhile, holds a ~20% stake in Flipkart, while the remaining stake is divided between various investors, including Tiger Global, Accel, Naspers, eBay, Tencent Holdings, Microsoft, among others.
SoftBank is also expected to exit and sell its entire stake. Other major investors like Tencent and Tiger Global may also sell their partial stake, as per the media reports.
What impact will the Walmart-Flipkart deal have on the Indian e-commerce and retail Industry?
The Indian e-commerce industry is all set to receive a huge boost from this acquisition owing to a combination of factors, including rising internet penetration, lower data costs, higher smartphone usage, and higher disposable income, among others.
The above factors make the Indian market very attractive for foreign players like Walmart, which is very evident from this deal. Existing Indian retail players like Dmart, Future Retail, etc., have already started their own online platforms. Most apparel retailers, however, use e-commerce platforms such as Flipkart and Amazon to market and sell their goods.
The deal is beneficial for Indian customers considering the fact that Walmart is able to provide goods at a cheaper cost owing to its scale and operational efficiency in many other countries. The same could be seen in India as well.
Walmart’s acquisition of Flipkart will provide the Indian e-commerce firm with additional funds to strengthen its position in the Indian market apart from giving tough competition to rivals like Amazon as well as other domestic players. After all, Walmart does have a successful track record of establishing itself as one of the most successful retailers in the US.