Walmart is reportedly in advanced talks to become the largest shareholder in Flipkart, a major Indian e-Commerce company, according to CNBC. The retailer could acquire an initial 20% to 26% stake before growing its share in steps, ultimately investing $10 billion to $12 billion and bringing the total to 51%, according to The Economic Times.
The deal represents a proxy battle in Walmart’s multi-front competition with Amazon, which is making its own forays into India. Partnering with Walmart would help Flipkart sell groceries online, according to Satish Meena, an analyst at Forrester Research. At the same time, Flipkart is Walmart’s “best available option” for accessing India’s retail market.
“In order to maintain the lead with Amazon, [Flipkart] needs to expand into grocery and, at the same time, maintain the gap in fashion and other categories,” said Meena in an interview with CNBC. Moving into grocery generally requires some kind of physical presence, he added, noting that a deal with Walmart could provide key leverage for this type of expansion.
Mobile is the preferred shopping platform in major emerging markets such as India, according to 3 Steps To Conquering The $4.5 Trillion Global Commerce Market. Global e-Commerce spending reached an estimated $2.29 trillion in 2017, according to eMarketer.