Walmart and Flipkart Announce Completion of Walmart Investment in Flipkart
Walmart Inc. and Flipkart Group announced the closing of the agreements for Walmart to become the largest shareholder in the Flipkart Group.
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“Walmart and Flipkart will achieve more together than each of us could accomplish separately to contribute to the economic growth of India, creating a strong local business powered by Walmart. Our investment will benefit India by providing quality, affordable goods for customers, while creating new skilled jobs and opportunities for suppliers. As a company, we are transforming globally to make life even easier for customers, and we are delighted to learn from, contribute to and work with Flipkart to grow in India, one of the fastest-growing and most attractive retail markets in world.”
Judith McKenna, president and CEO of Walmart International
The Flipkart investment transforms Walmart’s position in a country with more than 1.3 billion people, strong GDP growth, a growing middle class and significant runway for smartphone, internet and eCommerce penetration.
As Walmart scales in India, the company will continue to partner to create sustained economic growth across agriculture, food and retail.
Future investments by Walmart will support national initiatives and will bring sustainable benefits in jobs creation, supporting small businesses, supporting farmers and supply chain development and reducing food waste.
“We are poised and ready to deliver the full value of this partnership for India. By combining Walmart’s omni-channel retail expertise, supply-chain knowledge and financial strength with Flipkart’s talent, technology and local insights, we are confident that together we can drive the next wave of retail in India.”
Binny Bansal, Flipkart’s co-founder and group chief executive officer
READ MORE: Walmart Beats Amazon to Acquire Flipkart For $16 Billion
Structure and Financial Details
Flipkart’s existing management team will continue to lead the business. Tencent Holdings Limited and Tiger Global Management LLC will remain represented on the Flipkart board, in addition to independent board members, and will be joined by new members from Walmart. The board will work to maintain Flipkart’s core values and entrepreneurial spirit, while ensuring it has strategic and competitive advantages.
With the completion of the investment, Walmart now holds approximately 77 percent of Flipkart.
The remainder of the business is held by other shareholders, including Flipkart co-founder Binny Bansal, Tencent, Tiger Global and Microsoft Corp. Moving forward, Flipkart’s financials will be reported as part of Walmart’s International business segment.
Walmart’s investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business. Both companies will retain their unique brands and operating structures in India.
Now that the deal is fully completed, Walmart and Amazon are the two largest eCommerce players in India. How this may impact small businesses sellers from outside India will be interesting to watch.
India is a huge opportunity, and if either company develops a plan to bring North American and European goods to India, it could open up the country for better cross-border trade.
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Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.