bbc.com Why did Walmart buy India's Flipkart?
By Prasanto K Roy Technology writer
 Image copyright Reuters Image caption Flipkart is India's biggest e-commerce company Global retail giant Walmart has paid $16bn (£11.8bn) for a majority stake in Flipkart, India's biggest online retailer, making this the world's largest ever e-commerce acquisition.
Walmart, best known for its grocery stores, discount department stores and hypermarkets, is ubiquitous in the US. But its sales have barely grown offline and its online sales account for just a little more than 3% of its business in the US.
Flipkart, founded in 2007 by Sachin Bansal and Binny Bansal (no relation), is India's biggest e-commerce company and has had high-profile investors including Microsoft, Tencent and Softbank.
But after Walmart announced the deal on Wednesday, its shares tumbled 4%, a likely reflection of the high price the company paid for Flipkart.
Why did Walmart spend so much on Flipkart?"India is one of the most attractive retail markets in the world, given its size and growth rate," Walmart's president and CEO Doug McMillon said in a statement.
Walmart is betting on the fact that India's e-commerce market, pegged at a modest $38bn in 2017, is expected to grow up to $200bn by 2027.
E-commerce currently makes up less than 4% of the retail market in India, but that's predicted to change as the number of Indians using smartphones (and the internet) increases rapidly in the next decade. |
