Walmart to open 50 new stores in India

Walmart store. Credit Diego M. Radzinschi ALM

USA based world's largest retailer Walmart after a long round of speculation on Thursday officially announced that it would buy 77 per cent of stake in Flipkart for $16 billion.

Within hours of adding Flipkart to its shopping cart at a USA $16 billion price tag, Walmart CEO Doug McMillon told the e-retailer's employees that the deal was among the best decisions and emphasised that India was the best place was to be in, according to sources. While eCommerce is still a relatively small part of retail in India, we see great potential to grow. They (Walmart) are a brick-and-mortal company, by and large.

The Flipkart-Walmart deal is clearly a "big deal".

But is the Walmart-Flipkart deal good for India? "The fault is theirs for having stood on the sidelines", said an investor in a consumer internet startup, declining to be identified.

The transaction, apart from tax authorities, would be subject to clearance from Competition Commission of India and other regulators and will make India the biggest emerging market with US-based Amazon, China's Alibaba and Walmart pitted against each other.

The online retail giant's most consistent (and strongest) presence within Google's Shopping campaigns was in the home goods product category, although they also ran PLAs in other categories like furniture, office supplies, and novelty gifts. It also announced that it will closely study the metrics of the deal and move to the Government or appropriate Authority to seek a ban on the deal till the time all related issues are resolved satisfactorily.

"eBay has notified Flipkart and Walmart that it intends to sell its holdings in Flipkart, which will represent gross proceeds of approximately $1.1 billion".

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India is not an easy turf Back in United States, the deal has not gone down well with Walmart shareholders.

The report further said, "SoftBank believes in the upside potential of Flipkart under Walmart leadership, which could eventually offer an exit to the remaining shareholders by taking the company public in the USA".

"India is a key market for Walmart, where the company is battling to hold off advances from Amazon, which has made significant progress growing market share from about 10% in 2014 to 27% in 2017, compared to 38% to 34% for Flipkart during that same time", the analysts wrote.

On Wednesday at the employee town hall, employees of Flipkart were in cheer when the co-founder Binny Bansal announced a 100 per cent buyback of vested ESOPs (employee stock options).

In Brazil, a nation just coming back after a two-year recession and political unrest, Walmart has already closed stores, overhauled management and wound down its e-commerce platform.

"This investment is of huge 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".

With more start-ups entering the scene, Shah expects a steady increase in cross-border deal activity.

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