US grocery retail giant Walmart is in final stages of talks to acquire minority stake in the Bengaluru based e-commerce juggernaut Flipkart, according to a report published in The Economic Times. The report citing two close sources claims that Walmart may pick up 15-20% stake in the homegrown online shopping company. Furthermore, the report goes on to claim that this deal may get sealed by end of March.
Doug McMillon, president and chief executive of Walmart, reportedly led a top level delegation last week to Flipkart’s headquarter in Bengaluru. The details of the high profile meeting have not been public. Flipkart and Walmart have so far not issued any comments or statement on the report. Both companies are expected to remain absolutely tightlipped unless anything concrete comes out of the on-going discussion.
The news of Walmart wanting to invest in Flipkart started doing rounds in August last year, but the news didn’t gather pace until the U.S retail giant started initial discussions in early September. Logically, Flipkart would love to bring Walmart on its board, since this will result in a big push to its grocery business. Interestingly, investment discussion with Walmart comes at a time when Flipkart recently revamped its grocery business, with a re-launch in November last year.
Walmart investment will also lend further firepower to Flipkart to take on its deep-pocket rival Amazon. However, the Seattle based e-commerce giant recently pumped in record capital in its Indian arm that may very well offset the impact of Walmart’s investment. It is also worth nothing that Amazon has also invested significant amount of capital in its grocery business NowStore.
Until the beginning of the last year, Flipkart’s business was on downslide and as a result its valuation had taken a major hit. However, the Bengaluru Company got a major reprieve, after Japanese investment giant SoftBank agreed to invest record capital of nearly $2.5 billion. Since then it has made an impressive turnaround, with the e-commerce firm gaining the lost market share and customer traction.