World-renowned retailer Walmart, that is close to strike a deal to acquire majority stake in India’s largest e-tailer Flipkart, is planning to repeat the US-success formula, acquiring more startups in next few years, in India.
The retailer says it would continue to bet big in India.
“We’ve acquired 13 companies and we would love to do that here in Bengaluru as well. The last time we were here, we met a bunch of start-ups. My goal is to pick up somewhere between three and five start-ups in the next year or so, because we’ve had a lot of success in the US with that,” Walmart’s chief technology officer Jeremy King said in an interview to Mint.
Walmart, is likely to pick up 20-26 per cent stake in the Bengaluru-based company, may invest $1-2 billion in Flipkart. Flipkart’s early backers Tiger Global and Naspers will cash out if the deal gets through.
Through the investment in Flipkart, Walmart will take on its arch rival Amazon in India. In last ten years, Amazon has consolidated retail major’s market share on home turf- the US.
Over the past few years, Walmart has made significant strategic investments and acquisitions to have upper hand in the competition. In 2016, it acquired US-based online retailer Jet.com for $3.3 billion. In the same year, Walmart acquired a 5% stake in China’s second-largest e-commerce firm JD.com.
According to digital research firm eMarketer, Amazon currently holds a 43% share of the US e-commerce business, while Walmart has less than a 4% share.
Meanwhile, with a multi-billion bet on Flipkart, Walmart is targeting to build strong anti-Amazon alliances in India.
It will also hire more tech talents in coming months. Other than its tech teams in Arkansas, New Jersey and California, Bengaluru would be its main remote site, where it plans to grow team.
Entry of Walmart in India would take competition a notch up in the existing e-commerce space where investors such as Alibaba, Tencent, and SoftBank are also eyeing larger pie.
Walmart plans to acquire Indian start-ups and hire tech talent from here to lend it firepower against Amazon, even as it inches closer to acquire a majority stake in Flipkart
In December last year, Walmart India had signed 20 new sites for new stores. The retailer plans to add 50 new stores by 2022 to take the total store count to 70.
Almost 5-7 new stores will become operational this year. Presently, the company runs 21 Best Price wholesale stores in nine states. Walmart largely operates in the organized wholesale market. They are also eyeing non-food retail.