New Delhi, May 9: US retail giant Walmart is acquiring India’s largest e-commerce player Flipkart and the deal was sealed on Tuesday night (Japan time), when it would have been afternoon in India, SoftBank CEO (Chief Executive Officer) Masayoshi Son confirmed on Wednesday. An official announcement from Flipkart and Walmart is expected later in the day. Before the deal, SoftBank was the largest investor in the Flipkart with around 23 per cent stake in the Bengaluru-based company.
“Last night, (they) reached a final agreement and it was decided that Flipkart will be sold to America’s Walmart,” Son said while announcing SoftBank’s quarterly results.
Japan’s SoftBank Group Corp and Tiger Global Management are said to be selling off their entire stake in Flipkart. According to analysts, the deal is the world’s biggest-ever e-commerce acquisition and would pit Walmart head-to-head against Amazon in one of the world’s fastest growing markets. As the e-commerce battle in India hots up even further with this latest development, Amazon in the meantime, has pumped Rs 2,600 crore into its main India unit — Amazon Seller Services — taking the total capital infusion into the entity to over Rs 10,750 crore in a little over a year.
E-commerce sales in India hit $21 billion last year, according to market research company Forrester and are expected to soar as more people make greater use of internet access.
Flipkart sells everything from mobile phones, television sets, juicers to running shoes, sofas and beauty products. Amazon too has a similar range of product offering.
Walmart CEO Doug McMillon arrived in Bengaluru to make the announcement of the deal. The US retail giant is likely to bring its managerial expertise, although the existing leadership in Flipkart is expected to stay as they “understand the market well”.