As per the company, India's e-commerce industry is projected to grow four times faster than total retail through 2023, with a millennial population of 443 million and a growing middle class. Once the sale is completed, eBay will also be terminating the strategic relationship with Flipkart established only previous year.
We initially invested in Flipkart in August 2012, and we're proud to have been part of the journey to build the leading e-commerce player in India.
Amazon has already made a big dent in Flipkart's business by providing offers and free delivery options through their Prime subscription - a compelling enough reason to buy from Amazon. E-commerce sales in India hit $21 billion a year ago according to market research company Forrester, and are expected to soar as its population of 1.25 billion people make greater use of internet access.
In its announcement, Walmart said that it is talking to other potential investors who may join in what is being treated as a venture funding round.
In terms of the company structure, there won't be many changes.
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Walmart entered the Indian market in 2007 through a joint venture with a local company, years before Amazon debuted there. His Co-founder Binny Bansal, now Flipkart Group CEO, has chose to stay on, along with the current Flipkart CEO Kalyan Krishnamurthy. "This is the best place to be anywhere in the world", McMillon, who is also Walmart president, said.
It has been clear from the beginning that Japanese conglomerate Softbank was one of the key forces behind this deal.
According to Business Standard, people in the know have said that Walmart will acquire as much as 75 per cent in Flipkart, with an investment of $15 billion. Flipkart's founders as well as Tencent, Tiger Global and Microsoft will continue to hold minority stakes. The final position of the board has not been determined yet but Walmart plans to have independent members. The deal is widely expected to shake up one of the most thriving and exciting ecomm markets the world over. Sachin and Binny were the Jai-Veeru of Indian startup founders. This global attention by way of an acquisition will be a confidence builder for existing startups being forced by their investors to hit the IPO button.
But then there is Walmart - the multi-billion dollar American behemoth has been in the country for a few years in the form of limited wholesale business.
Alphabet, the parent company of Google, is also expected to be a part of this deal.
SoftBank, through its Vision Fund, had parked US$2.5 billion in the Indian company for a 20 percent share. While Walmart is sure to bring its cut-price game to India, Amazon's counter push may ensure that merchandise prices in India head even lower.