Flipkart, an India-based ecommerce company founded in 2007, may be the object of desire for not one but two two of the biggest retailers in the world.
Walmart has been in final negotiations to buy a majority share—at least 55%—for an estimated $8 billion to $12 billion. But on Wednesday Amazon reportedly countered with a bid to buy a 60% stake in Flipkart.
The ecommerce market in India was slow to take off, but it’s growing. eMarketer expects digital buyers in India will number 224.1 million this year, rising to 367.4 million by 2021. We forecast that retail ecommerce sales in the country will increase from $27.32 billion to $50.17 billion over the same period.
For Walmart, international expansion is a way to offset sluggish revenue growth in the US. It would also be a fast track to compete with Amazon in India. “Flipkart represents a ready-made way to enter India and gain immediate access to a customer base of more than 100 million people. It's also a company with a deep understanding of the market and has already built out its ecommerce technology—something Walmart has historically been lacking,” said eMarketer senior analyst Rahul Chadha.
If regulatory issues were overcome, Amazon’s stake in Flipkart would give the online retailer obvious advantages in India’s ecommerce sector. India was called out in Amazon’s Q1 2018 earnings as an area of investment, with Prime benefits and localized video content and Alexa skills being a focus.
Amazon says that Amazon.in is the fastest-growing marketplace in India, and that its shopping app was the most downloaded in that category in India last year.