Amazon Attempting To Take Over Flipkart; Will Walmart Lose The Race?

Date : April 04

If this happens, then this shall be the biggest acquisition Indian e-commerce has ever witnessed.

It seems that 2018 would be remembered as the year when everything changed for Digital economy in India. After we reported about speculations of a mega-merger between Ola and Uber, now there is news about a mega-consolidation in the Indian e-commerce space.

Amazon, world’s largest e-commerce portal is attempting to take over Flipkart, India’s largest e-commerce portal.

And, if this happens, then this shall be the biggest acquisition Indian e-commerce has ever witnessed.

But, what is the reason here?

Walmart?


Amazon Wants To Take Over Flipkart!


Ever since Walmart made it clear that they want a majority stake in Flipkart, and are ready to infuse big dollars at a valuation of $20-22 billion, the market is abuzz.

Sensing the opportunity, Amazon is also attempting to match the offer, and take over Flipkart by acquiring a majority stake of over 50%.


However, people close to the development are stating that Walmart may finally win the race, as the existing investors who are planning to quit from Flipkart want Walmart to come in, rather than Amazon.


Mint reported,

    “Amazon has held early exploratory talks to buy Flipkart even as the latter closes in on a sale to Walmart, the people cited above said, requesting anonymity.”

Existing investors in Flipkart: Tiger Global Management, Accel Partners, Naspers, IDG Ventures are more or less inclined towards Walmart and are ready to make an exit if Walmart acquires the majority stake in Flipkart.


On the other hand, Amazon will try every possible tactic to keep Walmart away from Flipkart – mainly because of their famous rivalry in the US, and their aggressive expansion plans in Asia.


Flipkart’s Stunning Turnaround Since 2016!


In 2016, when Flipkart’s valuation was reduced to $11 billion from $15 billion, and they were in desperate need of funds, Amazon had offered to buy out them for just $11 billion.

Flipkart refused and decided to revamp their business model, and now, the stunning turnaround is clearly visible.


They have raised more than $1.5 billion from Japan’s SoftBank Group since then, and have raised their valuation to $20 billion+, which Walmart is ready to accept.

This also means that if Amazon now wants to acquire Flipkart, they will also need to value them at $20-22 billion; and this is the real victory for Flipkart.


Kalyan Krishnamurthy, who was brought back into Flipkart is believed to be the man who triggered this turnaround, as his flagship Big Billion Day sale and other strategies helped them to increase their sales.


Now, it would be interesting to observe which side Flipkart turns: Walmart or Amazon?



SOURCE