From Flipkart vs Amazon, Now it’s Walmart vs Amazon:The news of collaboration of the US retail company Walmart Inc. with Flipkart is really hyped in the market these days. Sachin Bansal, the co-founder of India’s one of the largest e-commerce websites, Flipkart has accepted the offer from Walmart Inc. in which company’s 73% of the stake will be acquired by Walmart.
The news of Walmart acquiring the major portion of Flipkart’s stake comes up the deal which would lead to the exit of Sachin Bansal from the position.
This leads to a close competition with yet another e-commerce behemoth, Amazon which will adopt strategies to retain its customer base like coming up with various offers and Amazon coupons. Walmart Inc. is an American Multinational retail corporation which is world’s largest company in terms of Revenue.
It operates a chain of hypermarkets and discount department store that includes a huge variety of products at an affordable rate. The report says that Walmart had put Flipkart’s value at $22 billion to be the least and will spend a sum of close to $14.6 billion on its acquisition.
The factor daily report quotes that, “With the cash component to be close to 55% it will cause the exit of some of the investors in Flipkart”. 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.
News from Reuters came that, the company needs to clean up the cap table or consolidate small shareholders because the strategic investors don’t like to deal with the multiple shareholders as it becomes more troublesome to them.
Economic Times also mentioned that the co-founder Sachin Bansal may quit as there have been talks regarding Bansal’s departure. While Bansal is on the exit, the CEO Kalyan Krishnamurthy will continue with his position in the company and no changes regarding his position will be made.
The newspaper reports said that Walmart wants both the strong pillars of the company, Binny Bansal and Krishnamurthy to have crucial rules in the company.
Amazon is presently one of the world’s largest e-commerce giant and holds a very good reputation in Indian market too. Amazon is currently the biggest rival of Flipkart in the e-commerce market. In competition with Walmart, Amazon made an offer to buy 60% of Flipkart’s share to get the majority of ownership as compared to Walmart.
To maintain Amazon’s name in the market, it is trying every tactic to keep holding the firm position in the market. It is widely trusted by its customers and every year huge purchase is made by the company. With the span of time, Flipkart did lose its reputation in the market but Amazon has managed to maintain the same level throughout, in fact now it has become wider and bigger in terms of a customer network.
With Walmart having 73% stake of Flipkart, it gives a tough competition to Amazon. Both the companies have strong network and reputation globally, now Walmart will come up as a strong rival of Amazon in the Indian market also. These companies already compete with each other in US market and now the war to succeed will continue to be in Indian market as well.