Fibre2Fashion Magazine June 2018 June 2018 | Page 40

Walmart-Flipkart
Walmart bid $16 billion and valued the unprofitable Flipkart at about $20.8 billion, at roughly seven times the sales figures of last year.
Photo shows Walmart president and CEO Doug McMillon (left) with Flipkart’s co-founder and group CEO Binny Bansal. Pic courtesy: Walmart
It’s quite a big deal
Walmart’s recent acquisition of Flipkart has sent market analysts into a tizzy. Subir Ghosh
takes stock of the Indian e-commerce situation.
O
nly a year back, the e-commerce landscape was dominated by two players: Amazon and
Flipkart. With the acquisition of Myntra and Jabong by Flipkart, it would have appeared
as though a process of consolidation had set in, and that the years to come would see
the two in a no-holds-barred fight.
Now, with the buying of Flipkart by American retail giant Walmart in May, things have
changed in a way, and yet in many ways they remain the same. It would still remain a war between two
big players, only that now it will be fought between two multinationals. Both have the monies to sustain
themselves for the long haul, and both are known to be ruthless in carving out market shares.
A DONE DEAL
Innumerable stories had been doing the rounds all through this year about Walmart making moves
on acquiring a majority share in the debit-ridden Flipkart. There were even reports of Amazon itself
being interested in buying out Flipkart, as there were reports of Google-parent Alphabet being in talks
to invest about $3 billion for a roughly 15 per cent stake in Flipkart. All those speculations were set to
rest on May 9 when the big announcement came: that Walmart would be paying a whopping $16 billion
for a 77 per cent stake in the Indian company. The deal now awaits clearance from India’s anti-trust
regulator and is expected to close later this year.
40  | FIBRE 2 FASHION JUNE 2018