The much talked about deal between Walmart and Flipkart is now official, as the U.S.-based discounter is investing $16 billion in the India-based e-commerce outlet.
Still needing regulatory approval in India, once completed the deal would give Walmart a 77% stake in Flipkart. The remainder of the business will be held by some of Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.
“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading a transformation of e-commerce in the market,” said Doug McMillon, Walmart’s president and chief executive officer. “As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market.”
Binny Bansal, Flipkart’s co-founder and group chief executive officer, said Walmart’s investment will help fuel the company’s ambition to deepen its connection with buyers and sellers and help create the next wave of retail in India.
“While e-commerce is still a relatively small part of retail in India, we see great potential to grow,” he said.
The Walmart investment, company officials said, will also allow Flipkart to leverage Walmart’s omnichannel retail expertise and supply chain knowledge while simultaneously providing Walmart insight into the Indian retail marketplace.
Founded in 2007, Flipkart as of the end of its most recent fiscal year had net sales of $4.6 billion, which represented year-over-year growth of more than 50%, according to the company.