Fibre2Fashion Magazine June 2018 June 2018 | Page 42

Walmart-Flipkart
The world’s largest e-commerce deal was an all-cash transaction, with Walmart purchasing new shares of Flipkart worth $2 billion and buying a stake worth $14 billion from the firm’s existing investors.
group companies, PhonePe and Ekart. “Walmart may appoint or replace the chief executive officer and
other principal executives of the Flipkart group of companies, subject to certain consultation rights of
the board and the founder,” the SEC filing said.
The acquisition would include Flipkart’s other properties like fashion e-commerce sites Myntra and
Jabong, digital payments firm PhonePe and logistics company Ekart. The Flipkart-Myntra-Jabong set of
portals commands about 70 per cent of the market share in fashion. Ekart is present in over 800 cities
and towns across the country, and makes over 500,000 deliveries every day.
THE NEXT BATTLE
The Walmart takeover will help Flipkart in its pyrrhic battle with cash-rich Amazon, which had allocated
$5 billion to its India operations—$2 billion in June 2014 and $3 billion in June 2016. The number,
however, pales out in comparison to the Walmart bid figure.
But the American shopping giant is in here for e-tail, not retail.
According to Walmart’s own investor
presentation, India’s e-commerce market
is expected to grow four times faster
than overall retail over the next five years.
While the consolidated retail segment
will grow only 9 per cent between 2017-
18 and 2022-23, the corresponding figure
for e-commerce is 36 per cent. This
growth will be driven by smartphone
penetration which is expected to grow
from 30 per cent in 2017 to 58 per cent
in another three years. Morgan Stanley
estimates that India’s e-commerce
India has more than 400 million millennials, a growing middle-class and exploding
market will grow from $38 billion to $200
smartphone penetration, all of which are critical as shopping continues to shift online.
billion in a decade from now.
42  | FIBRE 2 FASHION JUNE 2018