The shopping war between Amazon and Walmart has finally reached India, with Amazon making a rival bid for Bengaluru-based online retail portal Flipkart. The highly successful Indian e-commerce platform was already in talks with Walmart regarding a prospective deal when the Bezos-led international giant pulled a fast one.
According to reports by an Indian local daily Mint, Amazon is back to disrupting Walmart’s plan of action by putting out a rival offer to snatch Flipkart from its longtime rival. Despite Amazon displaying its interest in acquiring Flipkart, the chances of it being acquired by Walmart stands high — especially when Flipkart’s biggest competitor is Amazon’s India wing.
While Amazon had more than doubled its business in India in the last fiscal year, Walmart, on the other hand, has very little brand recognition in India — operating just 21 wholesales stores in the South Asian country. To improve its brand awareness among Indian consumers, the retailer considered expanding its store footprint as a key strategy. Walmart has been scaling up its investments in India as it sees the two Asian countries — China and India — as key growth markets.
Reports earlier suggested that both the rivals would invest $300 million to expand their network in Indian retail market and gain a major market share. A report by Goldman Sachs claims that the Indian e-commerce market is expected to soar to $103 billion by 2020.
Walmart intends to own a 55 percent stake in the deal that values Flipkart at $21 billion. Last year, the company was valued at $12 billion when Vision Fund, part of Japan’s SoftBank Group Corp, purchased nearly a fifth of the company for $2.5 billion.
The deal would impact Amazon the most, with Flipkart-Walmart union becoming a strong force to reckon with, in the subcontinent. But given that we are in the fun and ever-changing realm of e-commerce, anything can happen from here out. Now that Amazon and Walmart war has entered a new territory, it is to be seen which retailer gets to the checkout line first.