You must be aware that while Walmart is not entering India anytime soon and once it did earlier, things did not go out well for the company. This means that it can’t compete with the likes of Amazon in India as it does in the US and other countries. However, it is worth noting that Walmart controls the Indian e-commerce market indirectly as it holds a majority stake in India’s biggest e-commerce store that is Flipkart. Along with Amazon, Flipkart holds a significant amount of the Indian e-commerce market as they are the two most viable options for consumers in the country.
Now, a new report from Wall Street Journal states that Walmart has just bought out stakes worth $1.4 Billion from Tiger Global in Flipkart which is a publicly listed company. This means that Walmart now holds a significant stake in Flipkart and it is after buying out a 77% controlling stake in the company back in 2018. At the moment, it is not known how much stake Walmart holds at Flipkart but we assume it is very close to 90% or even more as the company is now valued at a $35 billion valuation which has also decreased from $38 billion two years back.
It is said that Flipkart grew its market share in India thanks to its hold on the Indian tier-2 and tier-3 cities as well as villages of the country where the likes of Amazon did not focus. This also means that both the companies can co-exist but it is worth noting that neither of these companies are profitable at the moment which tells you a lot about the Indian e-commerce market. Also, Flipkart does not have a good reputation among the Indian consumers as it is often accused of fraud due to order cancellations as well as delaying refunds along with various other inefficiencies. Now that Walmart almost owns Flipkart, after the exit of its founders, we think that this could change and we do hope that it does. Also, Flipkart’s customer service is almost non-existent whereas Amazon has a top-notch customer service department in the country which is also one of its significant advantages in the market.
