Flipkart deal: Walmart says in talks with other players for additional investment

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"To tap into this new buying power, companies are going to have to staff a sales force with professionals from countries and cultures that may be very different from those of their current sales force", the authors observed.

This will rank as one of the world's biggest e-commerce acquisition and will now pit Wal-Mart directly against Amazon in their quest to penetrate the Indian e-commerce market. The company's India division owns and operates 20 Best Price stores, a membership-based wholesale operator. That's four times faster than the country's traditional retail market. As we previously reported, Amazon put in a competing offer to buy Flipkart earlier this month. That's a fraction of Walmart's latest annual revenue of $485.8 billion.

Walmart will pump $2 billion in fresh investment into Flipkart as part of the deal.

At around 6.30 pm IST, Walmart's shares on the New York Stock Exchange (NYSE) were down a little over five percent.

Flipkart is, in some ways, an echo of Amazon.

In online shopping, overall, Flipkart holds an eight percentage point market share lead over Amazon, according to research firm Forrester.

Flipkart past year named Kalyan Krishnamurthy, a former executive of investor US hedge fund Tiger Global Management, as the head of its core business, while Binny Bansal took the broader strategic role of group CEO. It now allows for a variety of payments, from credit cards to gift cards to direct bank transfers.

The deal between Flipkart and Walmart is in offing since September 2016, when the two sides had first initiated talks. Flipkart's supply chain arm, eKart, serves more than 800 cities and makes 500,000 deliveries daily.

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Jared Wiesel, partner at the tech-enabled consulting firm Revenue Analytics, said Walmart - which has traditionally operated physical stores - would also benefit from Flipkart's technological expertise.

"Now the danger is knocking at our doors", it warned, predicting "various disruptions" to the market, and forecasting the elimination of small and medium businesses, small shops, as well as the opportunity to generate more employment.

This undoubtedly will ignite an worldwide skirmish with Amazon, which already has identified India, the world's second-most populous country, as the emerging market of the future.

Sachin Bansal, who had co-founded Flipkart with Binny Bansal in 2007, would exit the company after the deal.

The deal hasn't gone down well with the tens of millions of small store owners who for years used political muscle to slow the arrival of worldwide retailers.

Amazon had reportedly tried to scupper Walmart's deal with Flipkart by negotiating its own purchase of a majority stake.

The deal also attracted the attention of Jeff Bezos, the richest person on the Bloomberg Billionaires Index. S&P Global Ratings changed its outlook on Walmart to negative. "After this market, the markets get considerably smaller and the political impediments get greater", said Goldberg.

It now runs 21 wholesale stores in the country. They've increased 14 percent over the calendar year. In Chile, it worked closely with suppliers to coax them into its way of doing business.

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