Walmart has completed due diligence on Flipkart, reports Reuters
Walmart’s 51% controlling stake in the Indian eCommerce company, founded by two former Amazon employees, is in progress, according to two sources.
Reuters reports Walmart has already floated a shareholder agreement, worth between $10 billion to $12 billion, which places Flipkart’s value at roughly $20 billion.
The strategic deal would leverage Walmart’s growth in the $25 billion Indian eCommerce market against rival Amazon – who have reportedly put forward a counter offer to Flipkart. A person familiar with the matter told Reuters that the likelihood of a Flipkart-Amazon deal was low due to the threat of domination and lack of competition for smaller retailers.
Morgan Stanley analysts have estimated Flipkart could reach $119 billion in sales by 2020.
There are challenges in Indian eCommerce – according to experts logistics and infrastructure need further development, despite the growth of mCommerce and eCommerce. Retailers shipping to India need to be aware of not only GST (and consider providing a fully-landed cost to shoppers) but the delays for consumers which may lead to a poor experience.