Walmart acquires 77% stake in Flipkart for $16 bn: What this deal means

After weeks of speculations and leaked information, the deal is done. Walmart Inc has announced it has signed definitive agreements to become the largest shareholder in Flipkart Group. Walmart will pay approximately $16 billion for an initial stake of approximately 77 per cent in Flipkart. The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.

While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition to transition into a publicly-listed, majority-owned subsidiary in the future. The investment will help accelerate Flipkart’s customer-focused mission to transform commerce in India through technology and underscores Walmart’s commitment to sustained job creation and investment in India, one of the largest and fastest-growing economies in the world. 

In a statement issued, Doug McMillon, President & CEO, Walmart, was quoted as saying, “India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of eCommerce in the market. As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market. We are also excited to be doing this with Tencent, Tiger Global and Microsoft, which will be key strategic and technology partners. We are confident this group will provide Flipkart with enhanced strategic and competitive advantage. Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.” 

Binny Bansal, Flipkart’s Co-founder and Group Chief Executive Officer, added here, “This investment is of immense importance for India and will help fuel our ambition to deepen our connection with buyers and sellers and to create the next wave of retail in India. While eCommerce is still a relatively small part of retail in India, we see great potential to grow. Walmart is the ideal partner for the next phase of our journey, and we look forward to working together in the years ahead to bring our strengths and learnings in retail and eCommerce to the fore.” 

Founded in 2007, Flipkart has led India’s eCommerce revolution. The company has grown rapidly and earned customer trust, leveraging a powerful technology foundation, including artificial intelligence, and emerging as a leader in electronics, large appliances, mobile and fashion and apparel. In a market where Walmart expects eCommerce to grow at four times the rate of overall retail, and with well-known platforms such as Myntra, Jabong and PhonePe, Flipkart is uniquely positioned to leverage its integrated ecosystem, which is defined by localized service, deep insights into Indian customers and a best-in-class supply chain. 

Flipkart’s supply chain arm, eKart, serves more than 800 cities, making 500,000 deliveries daily. In the fiscal year ended March 31, Flipkart recorded GMV of $7.5 billion1 and net sales of $4.6 billion representing more than 50 percent year-over-year growth in both cases. With the investment, Flipkart will leverage Walmart’s omni-channel retail expertise, grocery and general merchandise supply-chain knowledge and financial strength, while Flipkart’s talent, technology, customer insights and agile and innovative culture will benefit Walmart in India and across the globe. 

While Walmart and Flipkart will leverage the combined strengths of both companies, they will maintain distinct brands and operating structures. Currently, Walmart India operates 21 Best Price cash-and-carry stores and one fulfillment center in 19 cities across nine states in India, with more than 95 per cent of sourcing coming from India, aiding suppliers, creating skilled jobs and contributing to local economies across the country. Krish Iyer, President and CEO of Walmart India, will continue to lead that part of the business. 

Walmart’s investment includes $2 billion of new equity funding, which will help Flipkart accelerate growth in the future. Walmart and Flipkart are also in discussions with additional potential investors who may join the round, which could result in Walmart’s investment stake moving lower after the transaction is complete. Even so, the company would retain clear majority ownership. Tencent and Tiger Global will continue on the Flipkart board, joined by new members from Walmart. 

Read the full statement issued by Walmart here.

Industry Reactions 

Satish Meena
Satish Meena

Satish Meena, Senior Forecast Analyst with Forrester:
What the deal means for Walmart: “Walmart has been looking to get into the Indian retail market for more than 15 years, but the regulation of not allowing FDI into multi-brand retail has made it impossible for Walmart to access the Indian market. Walmart tried to enter via a wholesale model with Bharti in India, but failed. Now they see online as the only method to enter the Indian market, which leaves Flipkart as the best investment option for Walmart.” 

What the deal means for Flipkart: “For Flipkart, this deal is more than just money. If they are looking to raise more funds they already have Softbank as a backer. However, to remain the number one player in India (Amazon coming a close second in just 4 years in India), they are looking to expand beyond smartphones and fashion. This deal with Walmart can provide Flipkart the expertise of running offline stores, access to sellers and manufacturers, supply chain and the know-how to get into the grocery segment. Amazon has been selling grocery in India for the past one year while Flipkart has not rolled out this category. With Amazon closing the gap in categories other than fashion, Flipkart needs Walmart to remain competitive in the long term.” 

What the deal means for the Indian eCommerce market: “According to Forrester Data, the Indian online retail market is around ~$20 billion in 2017 (2.4% of total retail market in India), which is still relatively small when you compare it to the penetration in other mature markets. The upside is big for both Amazon and Flipkart in the next two decades. No other market except China and US can compete in terms of total retail opportunity. We expect the online retail market in India to reach $73 billion by 2022 from $20 billion in 2017. 

To reach the next 100 million buyers, both Amazon and Flipkart will have to invest billions of dollars in warehousing, last mile delivery, and ensure that they provide quality products at low prices. This is a time-consuming process and both these companies need patient capital to capture the online retail opportunity. For customers, the entry of Walmart is good news as they will get the best deal through competition between these companies.” 


N Chandramouli, CEO, TRA Research, (Publishers of The Brand Trust Report):
“The Walmart-Flipkart deal is a disrupter in online retail industry in India. Walmart’s partnership and investment in Chinese online store,, is the model that they will probably replicating in India as well. The partnership in China has turned the applecart for Amazon in the country and this new partnership has the potential to do the same in India. 

The partnership of the two giants, Walmart and Flipkart, will provide a new model by creating a mixed on-ground-online ecosystem difficult to replicate easily. Not only will Flipkart get access to nearly 2,000 of Walmart’s products exclusively, but Walmart will also get the well-established e-tailing delivery system that Flipkart has sharpened over the years, giving it logistics support throughout India. 

We are also likely to see another disruption that comes with the Walmart-Flipkart partnership. Due to Walmart’s strong base in grocery, this entity is also likely to go very aggressive on selling grocery products online very soon, and apart from giving Amazon a run for their money in this area, online grocery retailers like Bigbasket, Grofers are likely face the brunt of it. 

Also, the combination of the duo will help enhance the brand trust in e-tailing with the consumer, with counterfeits becoming common in all types online purchases thus far. All-in-all, consumers will certainly benefit in convenience, quality, variety, due to such large players entering the Indian online-retail turf.” 

Sanjay Sethi
Sanjay Sethi

Sanjay Sethi, Co-founder & CEO, ShopClues:
“The Flipkart team has done an awesome job in bringing the world’s largest retailer to India. This is also a great endorsement of the large opportunity that Indian market presents as well as the mettle of the Indian entrepreneur. It also proves that there is a lot of money to be made in the Indian start-up ecosystem.”



Shrenik Gandhi
Shrenik Gandhi

 Shrenik Gandhi, Co-Founder and CEO, White Rivers Media.
 "This move in the e-commerce industry is a very positive and welcoming move. It is a win-win situation for everyone - customers, company and the entire ecosystem. The biggest advantage of consolidation is synergy! When one of India's largest homegrown e-commerce players merges

with one of the giants of international retail, the synergy is something worth looking forward to. Also on a global level while Amazon went into the offline space with the acquisition of Whole Foods, Walmart acquired and now Flipkart to strengthen its online presence. This signifies that these two giants will deliver lucrative and most compatible solutions for end customers in retail, thus benefiting the entire ecosystem."

Ameen Khwaja
Ameen Khwaja

Mr. Ameen Khwaja, Founder & CEO,

"Walmart -Flipkart deal is a positive development for the Indian e-commerce industry. Apart from being the biggest M&A the country has witnessed in years, it brings with it two distinct advantages. Firstly, Indian online consumers stand to benefit tremendously. With Walmart comes its way of doing business: offering the best prices in market.
Secondly, a retail company of  such size will bring in its best practices – be it vendor management or logistics and supply chain management – which would definitely help build a more robust infrastructure for ecommerce sector as a whole., which now happens to be the only Indian-owned e-commerce player in the country, stands to benefit immensely by this development. Expect to see faster growth in near future. It’s a shot in the arm for the sector which has seen quite a few blips recently".

Indian Retail Industry

As representatives of the entire retail industry, it is RAI’s policy to not comment on any deals between individual companies. Having said that, we would like to affirm our support to both online and offline channels of retail as well as Indian and International retail. We believe that some e-commerce companies in India have not been adhering to the guidelines issued under the Press Note 3 of the FDI Policy for marketplaces. These companies have been directly or indirectly participating in pricing and discounting, which is against the policy that seeks to create a level playing field. We hope that while the government takes positive steps promote retail, it also takes strong steps to ensure adherence to FDI policy.



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