Why has walmart invested in flipkart

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Reference no: EM132250629

CASE STUDY -Flipkart – Walmart

Flipkart is the leading e-commerce portal in India followed by Amazon India. Recently there was a deal between flipkart and Walmart which happened to be the biggest eCommerce deal in Indian history in fact world’s largest eCommerce deal.

Amazon global is a leading e-commerce portal and Walmart wants to compete against it online and in fact wants to stay ahead of Amazon, hence it considered few points before taking this decision.

India is the only place Walmart could look at to fulfill its dream after China because the scope of development in India is more than any country for its size and growth rate. The customer base for Flipkart is more than Amazon India and Flipkart is growing rapidly every year and for fiscal year ending 2018. Bansals’ approach towards innovation, scope of development and management skills has impressed Mc Millan (President and CEO of Walmart) to think further on the acquisition – though Flipkart is nowhere close to profits.

Prior to this (flipkart acquisition) Walmart has already tried to enter eCommerce once in past by acquiring Yihaodian a Chinese online grocery marketplace in 2011 which did not work for them, hence they sold it to Alibaba’s rival JD.com in 2016.

Apart from the investment, Flipkart received $2bn additionally for it’s vision to accelerate growth directly benefiting its customers. Flipkart’s own supply chain arm eKart serves approximately more than 800 cities, delivering 5 lakh products in an average daily. With this deal, Walmart will bring in grocery and merchandise supply-chain knowledge and financial strength, and Flipkart will make the most of the merger to grow into a listable (part of the vision) giant quickly. Walmart’s main rival Amazon India is leaving no stone unturned when it comes to adoption of newer technology. The company is fast increasing the adoption of ML to cut product returns, improve the speed and accuracy of product deliveries. Similarly, Flipkart has also announced to push its effort to put ML and AI at the core of its business.

Walmart Labs is mostly looking for acqui-hires and niche tech-product startups. Acqui-hiring refers to the practice of buying a company in a cut-price deal, primarily for “hiring” the company’s founders and key employees. Walmart

Labs is currently hiring engineers with expertise on machine learning (ML), merchandise, supply chain, data science, product managers and cloud experts.

Online marketplace eBay has decided to end its strategic partnership with Flipkart and relaunch eBay India with a differentiated offering to focus on cross-border trade. Flipkart had bought eBay India operations last year. Flipkart had said during its acquisition of eBay.in that the platform would be leveraged for cross-border trade, a move designed to give Flipkart’s vendors access to eBay’s global customers and Flipkart’s customers access to eBay’s global inventory of products.

Questions 1. Why has Walmart invested in flipkart?

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Reference no: EM132250629

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