Walmart makes mark in India

  • Walmart makes mark in India

Walmart makes mark in India

Flipkart's oldest investors, Accel Partners and Tiger Global Management will exit partially - the latter's stake, in fact, will come down to just 5 per cent from 21.99 per cent.

Walmart works on an wholesale cash-and-carry business model and now has 21 stores in the country. "We now have 21 stores and plan to open 50 stores in 4 to 5 years". This in a way is giving competition to brands such as Metro Cash and Carry and also at the same time, making sure it does not lose out on the omnichannel experience it can offer, with its strong capabilities in the retail space.

Recently, Flipkart co-founder Binny Bansal had announced 100 percent buyback of vested employee stock options (ESOPs) with reports suggesting that it could be around $150 (Rs 10,000) a share, according to a Times of India report. While both companies claim that the deal will not bring about any major changes to the operations at Flipkart, Walmart is expected to lend its expertise to Flipkart in terms of logistics and supply chain while learning from Flipkart about running an ecommerce entity and how an ecosystem and the different pieces of it work and apply those learnings in other markets.

While previous reports had surfaced that Flipkart investor SoftBank might delay the deal to avoid hefty tax cuts, a new report by The Information speculates that SoftBank is still undecided on selling its stake in Flipkart to Walmart. In a note to clients, Stifel analysts led by Mark Astrachan provided some additional perspective on the battle between Walmart and Amazon.

Marketwatch shares some insight on Amazon's battle for market share in India.

Despite this, super markets and hyper markets continue to be prohibited territory to worldwide companies. After losing in China to Alibaba and JD.com, Bezos clearly would not want to take any chances with the next biggest market outside of US. Flipkart was been valued at about $22 billion in the buyout deal announced on Wednesday and Walmart is expecting to close the deal by the year-end.

Reports suggest that Walmart's acquisition of Flipkart at a valuation of almost $21billion has generated one of the largest pools of wealth for employees in India's corporate history.

The value of the employee stock options would be around $1 million each, said an Economic Times report, which also suggested that the U.S. retail giant may look to buy back all such shares owned by Flipkart staff, thereby making them rich by at least a million United States dollars.