Why did Walmart spend so much on Flipkart? Let us have a look at the reasons why Walmart has invested in Flipkart : The Common Rival – AMAZON.COM, INC ● The world of Business is surrounded by cut-throat competition full of rivalries and competition. ● Upon going through the following table, you will be able to see the different slabs of FDI allowed : ● It is clear from the above-referred table that the Investment Allowance in ‘E-Commerce’ is 100%, which Walmart has taken advantage of. In July 2017, Flipkart made an offer to acquire its main domestic competitor, Snapdeal, for around US$700–800 million. 6 Reasons Why did Walmart Buy Flipkart? It has beaten Amazon, Snapdeal, PayTM and all other e-commerce prospects single handedly when it comes to approach of clients and in terms of connect to the masses. ■On January 15, 2016, Walmart announced it would close 269 stores in 2016, affecting 16,000 workers. ACQUIRER – Walmart Inc. EVENTS ■ Early investors New York-based hedge fund Tiger Global and US private-equity firm Accel Partners will sell a majority of their stakes to Walmart. ■ Japan’s SoftBank Group Corp. has a fifth of Flipkart through its Vision Fund. In China, where the retailer has over 440 stores, it bought a 5% stake in JD.com, the second-largest online retailer in the country, in 2016. Wal-Mart Stores Inc. is in discussions with Flipkart Ltd., India’s largest e-commerce company by sales, about investing in the startup, according to a person familiar with the situation. ● Besides the US, Walmart is pumping investments in e-commerce in China, Mexico, and Canada. ● The answer is that Flipkart has the biggest Client Base of e-commerce customers in India. This Article focuses on the Walmart’s acquisition over Flipkart and the reasons why they have invested in Flipkart. SoftBank expected to sell its whole stake in the Walmart deal, Reuters reported last week. In July 2017, Flipkart made an offer to procure its main domestic competitor, Snapdeal, for around US$700–800 million. The Walmart and Amazon Rivalry has a long history going back to the very inception of Amazon, Inc. ● So, to put it in words, Walmart has not merely in a Company with huge e-commerce potential but, they have also gained their access to the Database of Indians which shall provide Walmart a better platform, to reach the masses for whatever product/service they have to offer. Walmart owns around 77% of the Bengaluru-based company in what is also the largest buyout for the US firm. Walmart is also running its stores as Best Price but it was not enough. The Walmart and Amazon Rivalry has a long history going back … Let us have a look at the reasons why Walmart has invested in Flipkart : ● The world of Business is encircled by cut-throat competition full of rivalries and competition. ACQUIREE – Flipkart Pvt. The deal will try to bring down Flipkart from public listed company to private listed company with Wal-Mart as majority stake holder of it. “It didn’t have any shortage of funds and Softbank and others were really invested. It has 100 million registered users, 100,000 sellers, 21 warehouses, 10 million daily page visits in 2018. Walmart, which acquired a majority stake (77%) in Flipkart for $16 billion two years ago, has again led a new 1.2 billion financing round. Here are the key facts about Flipkart: ■ Walmart goes back to 1962, when its founder, Mr. Sam Walton opened its first store at Walnut Street, Rogers, Arkansas, United States of America. Fancy yourself a bit of the entrepreneurship? Walmart Inc. sold $16 billion of bonds to help finance its investment in India’s biggest online seller, in the second-largest U.S. corporate debt sale of the year. ■ Walmart reaches back to 1962, when its founder, Mr. Sam Walton opened its first store at Walnut Street, Rogers, Arkansas, United States of America. ● Whereas, back in the United States of America, Walmart has shut numerous stores and has been aggressively focusing on the online retailing of goods. Various political and financial circumstances led to the failure and severance of all the ties between Walmart and Bharti Enterprises which also led to the downfall of the public image of Walmart. 1 e-commerce company is more than just an online marketplace. It generally is a four step procedure before any business entity takes any major step to restructure its setup – Ideation; Finding a Prospect; Weighing the Pros and Cons; and finally, execution & closure of the deal. Career opportunities for you stretch beyond research to editorial, sales, content management, digital marketing. Lately, India climbed 23 points in the World Bank’s ease of doing business index to 77th place, becoming the top-ranked country in South Asia for the first time and third among the BRICS. The Walmart-Flipkart deal, entrepreneurs like him say, show some segments may have matured, leaving little room for innovation. ● “Walmart needed Flipkart possibly more than Flipkart needed Walmart,” said Yugal Joshi, practice director at management consulting and research firm Everest Group. Before Walmart, Amazon was thinking of buying Flipkart. ● According to Google India Research, by 2021 India is expected to generate $100 billion online retail revenue out of which $35 billion will be through fashion e-commerce. Flipkart and its majority owner Walmart are existing backers of the Bengaluru-based startup, having invested an undisclosed amount in December last year. An earlier report from the Economic Times suggested that the sum was the first $10 million tranche of a total $50 million commitment from the two investors. The Walmart and Amazon Rivalry has a long history going back to the very beginning of Amazon, Inc. Furthermore, the Flipkart-Walmart Acquisition has helped India establish its own place before the world as a secure and flexible choice to business ventures and inter-country trading with a vast scope of potential and immense growth. Walmart’s investment includes $2 billion of new equity funding, which will help Flipkart accelerate growth in the future. What updates do you want to see in this article? With approximately 475 million users, as of July, 2018, which conspires of only 40% of its population ; India has emerged as one of the largest upcoming online retail growth market. ■ In April 2017, eBay announced that it would sell its Indian subsidiary eBay.in to Flipkart and make a US $500 million cash investment in the company. Ltd. Post this, Walmart has been rapidly investing in various e-commerce websites/forums like Jet.com, Moosejaw, Bonobos, etc. This was primarily on account of a five-fold increase in finance costs to Rs 4,308 crore, driven by a fall in valuation. It has 100 million registered users, 100,000 sellers, 21 warehouses, 10 million daily page visits in 2018. ■ Flipkart was founded in 2007 in Bengaluru, Karnataka by Sachin Bansal and Binny Bansal. Walmart and Flipkart … Today, Walmart’s stake in Flipkart stands at 82.3%. “It didn’t have any shortage of funds and Softbank and others were really invested. eBay promoted that the partnership would eventually allow Flipkart to access eBay’s network of international vendors and vice versa, but these plans never actually came to benefit. Walmart, the largest e-commerce giant acquired a controlling stake of 77% in Flipkart ( India’s largest e-commerce company by market share) by investing $16 Billion. Reasons why Walmart decided to invest in Flipkart! © Copyright 2015 © LawOrdo.com || Call : +91 9625063335. ■ In 2011, Flipkart domiciled to Singapore, as it looked to charm foreign investors to fund rapid growth. Amazon - 3 billion Dollar. Walmart wants to start ahead of Amazon and India will be the only market where it can possibly do that by investing in Flipkart, which is being valued at $18-20 Bn.” The same has been followed in the Flipkart – Walmart Deal. In the midst of all this, the world’s biggest e-commerce deal occurred in India when Walmart acquired Flipkart for $16 billion, an estimate of over $20 billion. After their first investment in December 2019, Walmart and Flipkart have once again invested in grocery startup Ninjacart. Very few people in India identify Walmart in its whole and that they have been showing their interests in the Indian Markets since the past 10 years now. Indian Market. With approximately 475 million users, as of July 2018, which conspires of only 40% of its population; India has emerged as one of the largest upcoming online retail growth markets. ● So, to put it in words, Walmart has not merely in a Company with huge e-commerce potential but, they have also gained their access to the Database of Indians which shall provide Walmart a better platform (served in a platter), to reach the masses for whatever product/service they have to offer. In China, where the retailer has over 440 stores, it bought a 5% stake in JD.com, the second-largest online retailer in the country, in 2016. ● One of the major questions which popped up in almost everyone’s minds upon listening to the news was – WHY FLIPKART IN INDIA? Tencent Holdings Limited and Tiger Global Management LLC will remain expressed on the Flipkart board, in addition to independent board members, and will be joined by new members from Walmart. Especially since, Flipkart was nothing but losses and few years ago, the survival of Flipkart as an entity was also a question. But very few have genuinely listed points which might have led to this mega Acquisition which left the whole world startled and set out a blazing fire of “change” in its truest sense. ● According to Google India Research, by 2021 India is expected to generate $100 billion online retail revenue out of which $35 billion will be through fashion e-commerce. Consolidated revenue jumped 29% to Rs 19,855 crore in fiscal 2017. ● While in India, Flipkart was in business, 2 years ago one of the main questions was whether Flipkart was going to sustain in the Indian E-Commerce Markets. ■ Other investors in Flipkart include the founders and Napsers Ltd, China’s Tencent Holdings Ltd, eBay Inc, and Microsoft Corp.invested $1.4 billion last year. ● It is not news, that after the prevailing political status of India and the enterprises taken by India towards ease of business, digitization of the country, etc has increased the potential of India manifolds. 1. In the last 2 years, the country has climbed 53 notches, a display matched in the past only by Bhutan. ■On January 15, 2016, Walmart proclaimed it would close 269 stores in 2016, affecting 16,000 workers. Amazon India. With this deal, Walmart will bring in grocery and merchandise supply-chain knowledge and financial strength, and Flipkart will make the most of the merger to grow into a listable (part of the vision) giant quickly. Online clothes sales are set to grow four times in the coming years. ● After China, India is the second most populated country in the world. Consolidated wealth jumped 29% to Rs 19,855 crore in fiscal 2017. Flipkart’s valuation fell from $15.2 billion in 2015 to $11.6 billion in April 2017, when it raised capital in a round led by Chinese internet conglomerate Tencent. Hiring a Criminal Lawyer in Toronto – What to Expect, Why You Need to Hire an Employment Lawyer in Toronto. ■ Walmart’s investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business. Write CSS OR LESS and hit save. BENTONVILLE, Ark., BENGALURU, India, Aug. 18, 2018 – Walmart Inc. 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