In 2015, Amazon surpassed Walmart as the most valuable retailer in the United States by market capitalization. "This investment aligns with our strategy and our goal is to contribute to India's success story, as we grow our business". Although Amazon opposes, Walmart has kept his decision.
Flipkart has a database of over 100mn users, giving Walmart a significant footing within one of the world's fastest growing digital economies with a number of digital companies such as Paytm having emerged in recent times.
Amazon, which had a chance to increase it's existing 31% share in the online retail market in India with immediate effect will now have to wait.
The controlling stake will set Walmart, the largest retailer in the world, in a more prominent position to battle its rival Amazon in the worldwide e-commerce space.
"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", he said.
Sachin and Binny Bansal started Flipkart in 2007 with Rs 4 lakh, going door-to-door to deliver books, they had no intention to sell their company irrespective of the valuation. Though the deal has not been officially announced yet as per various sources it is known that Flipkart bought back $350 million worth of shares from its investors. It now allows for a variety of payments, from credit cards to gift cards to direct bank transfers.
Its first investment in Flipkart came at a time when the Bengaluru-based startup was struggling to raise money.
Besides, "it is much more hard for the government to control and regulate foreign owned platforms particularly in e-commerce sector which has no boundaries", Khandelwal said.
Its supply chain arm, eKart, serves 800 cities, making 5,00,000 deliveries daily. Till now, as per the company claims each of its India outlets has turned profitable at the store level. Walmart's business in India was previously focused only on selling items directly to small businesses though its Best Price stores. Sachin encashed his 5.5 pc holding in Flipkart for over $1 billion.
On Wednesday, Walmart Inc announced it was buying 77 per cent equity stake in Flipkart for $16 billion.
The deal hasn't gone down well with the tens of millions of small store owners who for years used political muscle to slow the arrival of global retailers. "Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs". According to CB Insights, Accel Partners had invested in a $60 million secondary market transaction in 2010, when Atlassian was valued at $400 million.
Meanwhile, Amazon is also still fighting hard in India, with founder Jeff Bezos crowing last month that Amazon.in had the most-downloaded shopping app in India for 2017. Several tens of billions of dollars are at stake on both sides.