Walmart-Flipkart $15 billion deal

There is a literally financial turf war among two world's biggest retail giant of America Walmart's and Amazon in India. Walmart is closed the deal with 75% stake in Flipkart, amidst the speculations of exits of co-founders of the SoftBank-backed e-commerce marketplace.The biggest e-commerce business in India has closed for $15 billion.The sale values Indian e-commerce market leader at around $20 billion. With this India has become the main battleground for Walmart and Amazon, each of which lost out on the world’s largest e-commerce market - China. A question comes why these two global giants are targeting India as a opportunity geography, reason could be of population of 1.3 billion that is expected to surpass China’s in the coming years.

Amazon reportedly offered to buy a 60% stake in Flipkart on Monday, a deal that would have included $2 billion to cover the “breakup fee” Flipkart would have had to pay Walmart for pulling out of the deal. Amazon declined to issue a statement on the report, saying it does not comment on rumors and speculation.People familiar with the negotiations said Walmart has been keen on retaining only one of the two founders.World Grocery market is getting more dynamic and the delivery has become a prime front in the battle between Walmart and e-commerce rival Amazon.

Consumerism in India is growing fast. Sachin and Binny Bansal has brought a revolution in the e-commerce market. Bow, Sachin Bansal is likely to quit the company board as Walmart, the world's largest retail chain, nears a deal to pick up a majority stake in India's most valued internet company, people familiar with the development said. According to a Bloomberg report, SoftBank is going to sell over 20 per cent stake in Flipkart at a valuation of $20 billion. Besides, Google parent Alphabet is also likely to participate in the deal. SoftBank has already given the green signal for the deal. And as per earlier reports, the Japanese internet and investment conglomerate will get an exit of $4 billion for its $2.5 billion investment in Flipkart eight months ago. Flipkart and Amazon together have between 75% and 80% share of the ecommerce market in India and a consolidation of this magnitude has its own benefits. Everyday there are 1.2 million shipments happening in ecommerce. 

Meanwhile, Flipkart has bought back $350 million worth of shares from its investors as it seeks to convert its Singapore-incorporated company to a private limited firm. The move will further ease the way in for a new strategic investor.

In the US, Walmart is the only formidable competitor left for Amazon. Walmart has been growing its ecommerce operations a lot and Amazon has been increasing its footprint with physical stores. It’s natural for that battle to spill into international turf as well. Walmart's acquisition of Flipkart will help the world's largest retailer in challenging the dominance of Amazon which has been eating up its market share in the US. The deal will also give a fillip to Walmart's online ambitions in a significantly huge market like India.