Walmart shares fall as retailer announces Flipkart deal

Walmart shares fall as retailer announces Flipkart deal

An official statement by Walmart said that the investment will help accelerate Flipkart's customer-focused mission to transform commerce in India through technology, and underscores Walmart's commitment to sustained job creation and investment in India.

RSS-affiliate Swadeshi Jagran Manch on Wednesday objected to United States global retail giant Walmart's bid for "backdoor, barge entry into India through the proposed e-commerce route by buying controlling shares in Flipkart".

For the Indian start-up and venture-capital (VC) ecosystem, this deal is its most triumphant moment, marking a remarkable victory for an Internet start-up that was launched a decade ago in a country that has for the longest time been starved of major start-up exits.

The deal will also benefit homegrown firms, as consumers are attuned and comfortable to shopping online with e-commerce marketplaces.

For Walmart, the Flipkart deal will offer a big advantage in terms of presence in the Indian e-commerce market.

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Putting up a courageous face, Biyani said to the newspaper that Future Group has a lead over other retailers in the country and he can shore up his company's strength as India played host to the world's biggest e-commerce deal. Several tens of billions of dollars are at stake on both the sides.

Accel, one of the first investors in Flipkart, has earned a sevenfold return, including a 71-times return with its Accel India Fund.

Walmart still tried to enter India via a wholesale model, with Bharti Enterprises in India, but terminated the deal after a $151m loss.

Flipkart and Walmart together will make a formidable enemy for Amazon.

"This deal will certainly affect the small retailers adversely".

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What does the deal mean for Amazon?

It was just a matter of time before the world's largest retailer got its hands on the biggest e-commerce company in the world's fastest-growing retail market; a transaction that earned SA-based Naspers a tidy $2.2 billion (R27.6bn). Walmart will retain a 42 percent stake in the combined company.

Walmart has purchased a 77 percent in Flipkart for US$16 billion, valuing the company at more than US$20 billion.

Who has benefitted from the deal? .

United States e-tail giant Amazon has infused fresh capital to the tune of Rs 2,600 crore into its India unit, Amazon Seller Services, to strengthen the war-chest of the company against domestic rival Flipkart. Online sales in the world's second most-populous nation are growing about 35% a year, according to data tracker Euromonitor, fueled by a rising middle class and urbanization that present an attractive environment for e-commerce.

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Walmart's head of investor relations, Brett Biggs, stated at a conference that China and India have the major potential to be huge growth markets for Walmart due to the fact that more than 33% of the world population resides in these two countries and hence they continue to be very important chances for Walmart.

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