Adding a new and unexpected twist to the ongoing Flipkart-Walmart mega deal saga, search engine giant Google may end up taking minority stake in India’s homegrown e-commerce behemoth. Reports circulating in the media are rife about rumors that Walmart has convinced Google’s parent company Alphabet Inc. to pick up a minority stake in Flipkart.
Google is reportedly ready to offer $1-2 Bn for the minority stake. Walmart and Google are already tied in a business partnership wherein retail giant’s products are exclusively sold on Google Express. Google Express also offers personalized voice shopping for Walmart products online. There is every possibility that this existing partnership may have helped Walmart in brining Google on board for this mega-deal.
As per the arrangement, Walmart is mulling to pick up 85% to 86% stake in Flipkart while large part of the remaining stake will be taken over by Google. Following the deal, several of Flipkart’s existing investors like SoftBank, Tiger Global Management, Naspers, Tencent and other will have to take an exit after diluting their stake.
As for, how will Flipkart benefit from Google’s investment. Then many experts believe that apart from fund cushion and expertise skills, Google’s investment will offer new dynamism to Flipkart, which can prove very intimidating and also overbearing for Amazon in the long run.
Walmart-Flipkart deal may mark beginning of new era for Indian E-commerce Industry
Although Walmart-Flipkart deal is yet to be official, sources close to matter claim that negotiations are in final stage and that deal will be sealed in matter of few days. Regardless of when this deal materializes, it may mark a beginning of new era for the Indian e-commerce industry.
Firstly, this high profile deal will bring together two American retail giants (Amazon and Flipkart) at the very heart of Indian e-commerce battle. Secondly, it will also mark the beginning of foreign companies’ domination in the Indian e-commerce industry. After all, following this deal, Flipkart will technically lose the proud badge of being India’s home grown e-commerce company.
In this context, it must also be noted that India’s another homegrown e-commerce company Paytm Mall is largely foreign owned, with Chinese giant Alibaba and its subsidiary company Ant Financials holding the majority stake.