U.S. based world’s biggest retailer, Walmart Stores Inc is in advanced talks to acquire a significant minority stake in leading Indian e-commerce marketplace Flipkart, financial daily the Economic Times reported on Tuesday. The deal could be finalised by March, it said.
Chief executive officer of Walmart, Doug McMillon led a delegation that visited Flipkart's Bengaluru office early last week as a part of this exercise. The other members of the team included Walmart e-commerce CEO Marc Lore, founder of Jet.com that was acquired by Walmart in 2016, and Judith McKenna, who will take over as president and CEO of Walmart International on February 1. She's currently its chief operating officer.
Walmart refused to comment. "As a policy, we don't comment on market speculation," a spokesperson said, adding that McMillon had been in the country to review the cash and carry business, global technology centre and global sourcing- its three units. Flipkart also refused to comment.
The strategic deal would be a fitting reply by Wal-Mart against its U.S. rival Amazon.com Inc, which is expanding rapidly in a market that Bank of America Merrill Lynch has estimated to reach a staggering $220 billion in value of goods sold by 2025 from about $11 billion last year.
Walmart had teamed up with Japanese e-commerce company Rakuten last week. Walmart will start selling Aura-branded e-readers made by Kobo, a division of Rakuten, in stores and online at Walmart.com as part of the deal. Kobo is one of the Amazon Kindle's competitors.
Flipkart, launched in 2007 by two former Amazon employees, sells everything from cell-phones to suitcases and cosmetics. Tiger Global Management and Accel Partners are its present investors..
A Wal-Mart bet on Flipkart would come at a time when Amazon is planning an aggressive expansion into India.