05 May, 2018
The bid also emphasizes the importance of gaining a greater foothold in online sales in India, a market expected to be worth $200 billion a year within a decade. This comes amid reports that Flipkart's largest shareholder SoftBank may be pushing for a merger with Seattle-based Amazon. The Walmart-Flipkart combine also has the potential to make a global entity, by replicating the model outside India as well.
The report follows reports of U.S. retail giant Walmart's $12 billion deal to acquire a 55 per cent stake in the Bengalure-based retailer, which is likely to be signed as early as next week.
Flipkart and Amazon India did not reply to email queries.
Walmart initially entered the Indian market in 2007 through a joint venture with India's Bharti Enterprises, years before Amazon arrived. Moreover, a longdrawn process could also create uncertainty among employees and vendors of Flipkart, the sources said. Associating with Walmart will give Flipkart a much-needed fillip to pursue growth. Amazon said it does not offer comments on rumours and speculation, and Flipkart did not immediately respond to a request for comment.
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But Flipkart presents a massive business opportunity and that seems to be driving up valuations, aided by the fact that Walmart has also been stalking the company. At the same time, talks with Walmart have progressed to final stages, with a deal expected to be completed in the next few weeks.
Further, the American retailer could even end up spending anywhere between $8 billion and $12 billion to buy the stake, the people said.
The Japanese company's founder and chairman Masayoshi Son saw the potential merger between the two e-commerce behemoths as a way to get his company a bigger play in India's promising e-commerce market.
India's e-commerce industry is expected to reach US$200bn by 2026, up from $38.5bn a year ago, according to the India Brand Equity Foundation, which was founded by the Indian government. The Amazon bid, the person said, is pegged at $22-23 billion.
Walmart's shares were 0.84 percent down at $86.67 during afternoon USA trading.