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Walmart and Amazon May Spar Over Online Retailer Flipkart

Walmart and Amazon May Spar Over Online Retailer Flipkart

Walmart is nearing a deal to buy a majority stake in Indian e-commerce company Flipkart, Reuters reports.

The purchase would be Walmart’s largest acquisition of an online company, but Amazon may attempt to step in and present a counteroffer, Reuters says.

Walmart and Flipkart could come to an agreement “by the end of June,” according to the Reuters article. Walmart has “made a proposal to buy 51 percent or more of the Indian company for between $10 billion to $12 billion,” the article says.

Prior reports about negotiations between Walmart and Flipkart in 2016 said Walmart was interested in becoming a minority owner.

But Amazon could still be considering its options to align with the Indian company, Reuters reports.

Research firm Forrester estimates that Flipkart dominates about 40 percent of India’s e-commerce marketplace, making it a tempting target for Amazon to acquire. Two former Amazon employees started the Indian company in 2007,  Reuters says.

As an added incentive for Flipkart to negotiate a deal with Amazon, the U.S. e-commerce titan has offered a $2 billion “breakup fee” to be paid by Amazon if it backs out of purchasing Flipkart, CNN Money reports.

Flipkart launched in October 2007 and is based in Bangalore, India, according to the company’s website. The e-commerce platform offers more than 80 million products in more than 80 separate categories, from footwear and baby supplies to jewelry and smartphones, the website says.

In addition, the company has more than 100 million registered users, 10 million daily website views and 21 warehouses, according to the website.

If the deal to purchase a controlling stake in Flipkart is successful, Walmart might be able to gain a bigger foothold in India’s retail marketplace.

Walmart currently operates 21 stores in the country, but has long sought to expand its reach in the country, Reuters reports.

About Todd Taber

Todd Taber
Todd is an assistant editor for Hardware Retailing magazine. He graduated from Indiana University where he majored in journalism and French. Throughout his career, he has aimed to highlight small businesses and their community value. He joined NRHA in 2017 and now serves on the news and marketing teams. In his free time, he likes to run, spend time with family and travel the country.