Flipkart CEO Kalyan Krishnamurthy's message to sellers

Devin Lawrence
May 13, 2018

They are shareholders in the company and are now in for a treat after the United States retail giant Walmart acquired 77 percent of the stake for $16 billion in the Bengaluru-based e-commerce firm. However, by no stretch of the imagination does this mean Amazon's business in India is doomed, with Bezos and co investing a further USD$5bn (£4.2bn) into their business in the country at the end of past year.

In what is now the biggest M&A deal in Indian e-commerce sector, Walmart on Wednesday announced it will buy a near 77 percent stake in Flipkart for about $16 billion (Rs 1.05 lakh crore). "We deal with the government at all kinds of levels all the time... we have met before and I am sure will meet again".

Amazon has a dominant position selling to millennials online, and it may be hard for Walmart to unseat its rival.

The mega Walmart-Flipkart deal may have created some tough competition for their bitter rivals like Amazon and Alibaba, but almost hundreds of current and former employees of Indian e-commerce giant Flipkart, it has come as a blessing! Why? "Plans are on track", Walmart India President and CEO Krish Iyer said at a select media roundtable called to explain the Flipkart deal.

According to a PTI report: He is also learnt to have said the company intends to "empower" Flipkart and its staff as well as learn from them about building full ecosystems and payments. "Having said that, in this deal there is a risk of a new geography (India)".

Industry watchers see fresh challenges for domestic cash & carry retailers, as an intense fight between two global biggies, Walmart and Amazon, for bigger market shares may mean more discounts and sale days for offline players, squeezing margins.

Besides, "it is much more hard for the government to control and regulate foreign owned platforms particularly in e-commerce sector which has no boundaries", Khandelwal said.

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The income tax department has sought details of the deal that Walmart announced on Wednesday.

"Online groceries would be where Walmart-Flipkart and Amazon would start focusing going forward", CMR said.

The co-founder and chairman of the Flipkart, Sachin Bansal has given his resignation to the company with a farewell post on facebook, he sold all his 5.5 percent of stakes for $1 Billion. While this proves that Indian businesses are capable of offering stellar exits to investors, it also shows that the country has not been able to sustain local corporate champions.

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. "Son is a big believer in India and thinks that the valuation of the company (Flipkart) can go up further".

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

It looks as though Amazon has stopped bidding on product listing ads, after a year and a half of running these.

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