WALMART – FLIPKART

ACQUISITION
HISTORY

WALMART FLIPKART
1. AMERICAN COMPANY 1. INDIAN COMPANY
2. ESTABLISHED, JULY 2ND, 1962 2. ESTABLISHED SEPTEMBER 5th ,
3. HEADQUARTERS: BENTONVILLE, 2007
APKANSAS, U.S 3. HEADQUARTERS: BENGALURU,
4. FOUNDER:SAM WALTON INDIA

5.CEO: C. DOUG MCMILLON 4. FOUNDER: SACHIN BANSAL, AND

BINNY BANSAL
.
5. CEO: BINNY BANSAL

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▪ The $16 billion Walmart-Flipkart deal marks a
Amazon.
milestone in the world's largest e-commerce
e-Com player
deal ever. likes of the US
▪
- against the
Walmart signed a definitive agreement to
billion by 2026
become the largest shareholder in Flipkart
over $200
Group. to be around
▪ The latest deal puts Walmart directly on the
ket - estimated
map of India's growing e-commerce market -
estimated to be around over $200 billion by
2026 - against the likes of the US e-Com 3
player Amazon.
Wal- Mart Investment in Flipkart

▪ Control over indian market.

▪ It will get a partner in its war with Amazon
▪ It wants Big data on Indian Consumers
▪ Wal- Mart wants access to Flipkart’s
suppliers.
▪ Growth of Indian start-up in a short span
▪ Walmart lobbed for years seeking 4

permission to open its brick and mortar

Impact of Acquisition

FLIPKART GAINS:
▪ The company will shed its startup tag and
become part of a global giant. It will give major
boost to the business of Flipkart in India.
▪ Walmart with its expertise in retail
management will give Flipkart an edge over its
competition.
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▪ Flipkart is likely to get access to newer
markets including in developed economies,
thanks to Walmart.
▪ The infusion of fresh funds will help Flipkart
expand its operation.

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CONSUMERS GAIN

▪ Notwithstanding the intense rivalry in the

market the outcomes could be
advantageous to the consumer; greater
innovations and ideas will lead to better
products and services.
▪ Walmart whose strength lies in it world-
class direct sourcing will help to reduce
costs and consequently bring down prices 7

of products.
• Walmart may also invest in infrastructure like
warehouses, technology and delivery
solutions that will help in increasing reach,
faster delivery of goods and consumer
satisfaction.

• Exclusive deals with global brands which

aren't yet available in India will offer Indian
consumers a wider basket of international
goods than what is being now offered.

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EMPLOYEES GAIN

▪ Flipkart employees have reason to cheer as

they can now expect large payouts in the
form of employee stock options as a result
of the company's valuation increasing from
$11 billion to $20 billion.
▪ There is also the chance of better career
growth for employees.
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EFFECT ON E- COMMERCE SECTOR

▪ Walmart expects to attain the maximum

share percentage of the e-commerce
market in India.
▪ And that raises fears of loss of business
among traders, sellers and retailers since
Walmart could bring multiple private labels
to India and flood the e-commerce platform
with its own products. 10
• These small retailers had even approached the
Competition Commission of India with the plea that
foreign direct investment FDI norms were being
violated by this deal.
• Walmart's biggest rival and one of the market
leaders in India, Amazon sees the merger as a
threat and had even offered a rival deal to Flipkart.
• Walmart is foraying in to e-commerce right now
since Amazon has already started building an offline
retail presence through partnerships under its
Udaan project.
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FUTURE PROSPECTIVE

▪ Walmart India plans to have around 50

outlets by 2020
▪ According to Krish Iyer, chief executie of
walmart india
▪ “ The strategy is to owning a city, owning a
state or province”
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•A deal with Flipkart is deeper than just e- commerce in
India. It may actually open up a very viable route for
walmart to exponentially grow its business in the country
and to become a dominant player in the food and grocery
retail business.

• Walmart has been in negotiation with several e-commerce

firms, including Shopclues and Snapdeal for presence
across online platforms.

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• MORE INVESTORS TO JOIN IN: Walmart and Flipkart are
also in discussions with additional potential investors who
may join the round, which could result in Walmart's
investment stake moving lower after the transaction is
complete. Even so, the company would retain clear majority
ownership. Tencent and Tiger Global will continue on the
Flipkart board, joined by new members from Walmart.
• AIM TO BECOME PUBLICLY-LISTED: The new Walmart-
owned entity's immediate focus will be on serving customers
and growing the business. The company will also aim to
transition into a publicly-listed, majority-owned subsidiary in
the future.
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• E-COMMERCE TO GROW : Walmart expects India's e-
commerce market to grow at four times the rate of overall
retail, and with well-known platforms such as Myntra, Jabong
and PhonePe, Flipkart is uniquely positioned to leverage its
integrated ecosystem, said Walmart.

• WIN-WIN FOR BOTH FIRMS: The deal is a win-win for both

the companies. Flipkart's supply chain arm, eKart, serves more
than 800 cities, making 500,000 deliveries daily. In the fiscal
year ended March 31, Flipkart recorded GMV of $7.5 billion
and the net sales of $4.6 billion representing more than 50 per
cent year-over-year growth in both cases, said Walmart.
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• BIG 'MAKE IN INDIA' PUSH: Walmart said it
supports small business and 'Make in India' through
direct procurement as well as increased
opportunities for exports through global sourcing and
e-commerce. The company aims to partner with
kirana owners and members to help modernize retail
practices and adopt digital payment technologies.
• LOCAL OUTSOURCING, BETTER
LOGISTICS: The company says it would support
farmers and develop supply chains through local
sourcing and improved market access. It primary
focus would also be on reduced food waste by
improving waste management practices and
investing in supply chains, especially cold storage.
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