Walmart officially acquires 77 percent stake in Flipkart

Flipkart Chart1

The Walmart-Flipkart deal, said to be the largest e-commerce deal in the world, has set the ball rolling for renewed investment into the Indian company, which is losing money with no short-term path to profits.

The fact that most of it was already owned by foreign companies or that it is domiciled in Singapore didn't stop people from feeling pride about this Indian firm that had grown so quickly. Walmart and Flipkart will remain separate brands and the Indian e-commerce company will have an independent Board, which will be revamped to give representation to the U.S. firm.

The Walmart-Flipkart transaction should therefore now "get the regulators to sit up and take notice, given that the principle of FDI not being permitted for FDI in multi-brand retail is there", TP Pratap, co-founder at Qwikcilver Solutions, said in a phone interview. The deal values Flipkart at $21 billion, catapulting it among the most valued internet startups in the world.

The deal is subject to regulatory approvals including Competition Commission of India, and is expected to close later this year. Walmart is known for killing small businesses using ultra low prices. Walmart has revealed it will pay $16bn for a 77 percent stake in the Indian e-retailer.

The CPM said it was common knowledge that Walmart sourced its products from global markets and now these will be sold in India, further destroying the small scale and medium scale sector which is the largest provider of employment after the agricultural sector. "These companies have been directly or indirectly participating in pricing and discounting, which is against the policy that seeks to create a level playing field", Retailers Association of India alleged.

With platforms such as Myntra, Jabong and PhonePe, Flipkart is positioned to leverage its integrated ecosystem, which is defined by localized service, insights into customers and an efficient supply chain.

U.S. retailer Walmart has finally moved in to take over Flipkart's business in the country after settling on a 77 percent stake acquisition of the latter in a deal that's worth $16 billion. "We were a group of 8 friends from IIT Delhi and we used to hang out together all the time and we were best of friends", said Binny recalling the Flipkart journey.

A group of Indian traders has expressed skepticism over much publicised Walmart and Flipkart business deal. "We have met before and I am sure will meet again".

Launched in October 2007, Flipkart is India's largest e-commerce marketplace.

"I'll be watching and cheering from the outside - Flipsters, you better continue to do a good job!" he said.

The newspaper reports said that Walmart wants both the strong pillars of the company, Binny Bansal and Krishnamurthy to have crucial rules in the company. "While eCommerce is still a relatively small part of retail in India, we see great potential to grow".

India's hot economy makes it attractive to companies eager to sell goods to its massive population.