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Walmart Purchases Majority Stake in Flipkart

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Walmart Purchases Majority Stake in Flipkart

Walmart Dips Its Toes Into Indian Markets

On Wednesday, Walmart announced that it had reached a multi-billion deal to purchase the majority stake in Flipkart. Flipkart remains the largest and most prominent eCommerce platform in India, so this means quite a lot for the company. In a stroke of odd events, America’s leading brick and mortar store will clash with the world of eCommerce.

Amazon is a clear competitor for the commerce giant that is Walmart, especially with their new dabble in the eCommerce world. Although Amazon has just entered India, they’re slowly creeping up the ladder and creating problems for Flipkart. That’s without the $2 billion that Walmart just pumped into the firm. This is a massive leap for Walmart, but also a massive leap for India’s internet industry. However, although the benefits for Flipkart are quite clear, Walmart’s approach is questionable.

Is This Bold Move Worth It?

India doesn’t have a high conversion rate for online shopping, and Walmart is taking a huge risk with this deal. The giant has continuously proven its strength with physical storefronts pretty much dominating the United States, but it’s had a shaky past with eCommerce. Perhaps, as India continues to transition to the online world, this risk will pay off. However, the possibilities of success are speculative, as Flipkart hasn’t exactly had a smooth ride on its own.

Flipkart may have brought impeccable service to India through a variety of services, but Amazon has boasted better prices and service that leave Flipkart in relative danger. Due to these factors, Walmart was able to buy shares at a lower price. However, that doesn’t give it any gain over Amazon, who truly is the fiercest eCommerce warrior. Entering the battle is one thing, but with no apparent strategy, success is a long road ahead.

While early Flipkart investors have gained quite a lot of money from this transaction, it’s unclear what the future holds. Walmart can’t expand its storefronts in India the way that it has done in America due to regulations, but it clearly intends to make its presence known through wholesale and eCommerce strategies. The eCommerce strategy, however, still remains unclear.

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