US-based e-retail mammoth Amazon is likely to jump into a deal to buy a stake in Flipkart where Walmart Inc. is already in advanced talks, media reports claim.
According to a report appeared in business newspaper Live Mint, Flipkart is likely to go for a deal with Walmart over Amazon. However, none of the parties involved in the matter has stated anything on the reported development.
Amazon seems worried as if the deal goes through, Walmart will hold more than 40 per cent stake in Flipkart. If materialised, it will pose a serious challenge to Amazon India. Markedly, Walmart is already the biggest competitor to Flipkart in the USA.
According to the report, the deal between Flipkart and Walmart is likely to be sealed at US $ 21 billion which will give the latter a majority stake through a mix of primary and secondary share purchases.
It is being speculated that if the deal gets through with Walmart, then Flipkart will be in a better position to give an even tough competition to Amazon India.
According to estimates by research firm Forrester, Flipkart, established by Sachin Bansal and Binny Bansal, ex-employees of Amazon in 2007, controls nearly 40 per cent of India’s online retail, ahead of Amazon.
Flipkart and Amazon India gave a tough competition to each other in the E-tailing Leadership Index, compiled by RedSeer, to grab the top spot last year. In the July-September 2017 period, both the companies scored 92.
As per the report, Flipkart emerged as the most-trusted Indian e-tailing brand while Amazon offered better user experience (from product discovery to after-sales services).
Both the e-retailers announced their expansion plan in India. Flipkart announced to set up a logistics hub in West Bengal and Bengaluru while Amazon also announced setting up of too has been spreading its network of fulfilment centres in India in view of the increasing consumer demand. It just announced the addition of six new FCs in Mumbai, Pune, Lucknow, Gurgaon, Bhopal and Coimbatore.
Stay tuned for more updates!