As Walmart Swallows Flipkart, the Dream of an Indian Alibaba is Dead

Not an easy path

He was in fact, until the final stage of the discussions with Walmart, hoping to buy more shares and not have to sell his stake, ET reported. Pending customary regulatory approval, the acquisition could upend efforts by giants like Alibaba and Amazon to expand their presence in the nascent Indian market which is seen as having great potential. But, he adds that going forward, numerous leadership positions at Flipkart will be replaced by Walmart and that the U.S. company will get its own people to take up these roles within the next 18-24 months.

Walmart CEO Doug McMillon said on Thursday that he sees cash-and-carry and online retailing as two different types of businesses and predicted that India would have more than two major players vying for a share of its rapidly expanding e-commerce market. Acquiring e-commerce startup Jet.com two years ago has helped, but the Flipkart deal suggests that future moves will likely come outside the US.

Shardul Amarchand Mangaldas corporate head and partner Raghubir Menon led for Walmart.

The Arkansas-based company, which has 21 stores in India, plans to open 50 more stores in the next four-five years, said Walmart India president and CEO Krish Iyer. The venture capital ecosystem has received a boost and the investors' successful exit is expected to power the VC business in India for a long time. Walmart's buyout of Flipkart helps Tiger Global cover for all its bets in India.Similarly, Accel Partners, the first institutional backer of Flipkart which have pumped in close to $100 million in the company over the years, have raked in an approximately eight-fold return.

Amazon was also said to have put in an aggressive offer to buy 60 per cent of Flipkart but the board of the Indian firm is said to have favoured the Walmart offer.

Worldwide business contributed less than a quarter to the retailer's total revenue of $500 billion (roughly Rs. 33.6 lakh crores) in fiscal 2018.

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However it may want to portray the purchase, writes Bloomberg Opinion columnist Mihir Sharma, "the truth is that the deal represents a second-best outcome - if that - for Walmart as well as for Indian consumers and farmers". The deal also calls for Walmart to invest $2bn in equity funding into Flipkart.

The experience of other countries is that their domestic companies were sold out to bigger MNCs, and all over the world giants like Walmart and Cosco have taken over, the SJM co-convener said.

Softbank, the current largest investor of Flipkart, is selling its entire stake of around 20% and will get almost $4.7 billion, which is 1.5 times of its initial investment of 2.5 billion dollars. The remainder of the business will be held by some of Flipkart's existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.

Sachin Bansal said he will be "cheering from the outside" and urged Flipkart team to continue with the momentum.

Barik, who also owns an online flower delivery start-up, Morning Flower, feels his association with Flipkart will bring more opportunities in the coming days.

What do the world's largest retailer Walmart and India's largest online marketplace have in common?

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