The battle for dominance on the Indian e-commerce market seems to be stepping up a notch: Amazon may be looking to buy a majority stake in Flipkart, trying to better Walmart which already started negociations with the Indian online retailer.
Amazon enters the mix
American department store Walmart may well be facing competition from Amazon in its bid for majority ownership of Flipkart, Amazon’s biggest rival in India. American news sources reported on Wednesday that the online retail giant has made a formal offer to buy 60% of Flipkart, twice the amount of shares that Walmart was hoping to acquire for its 10 to 12 billion dollar (8.4 to 10 billion euros) budget.
It is unlikely that Flipkart will agree to sign over such an extensive part of its shares to either party: only last month, Flipkart shareholder Softbank resisted Walmart’s bid for just 30% of the Indian company. However, Amazon’s interference with the Walmart-Flipkart deal, which was close to being sealed according to insiders, does show the importance of gaining ground in India, a market expected to be worth 200 billion dollar (170 billion euros) a year within a decade.
Behind the scenes
For Walmart, the deal with Flipkart may well be its only opportunity to get a foot in the door in India, while Amazon has been investing billions of dollars to gain a greater foothold in the country’s e-commerce market and is, understandably, unwilling to accept further competition from Walmart in the region.
Two years ago, Amazon already approached Flipkart with an offer ultimately deemed too low for a 51 to 55% stake in the company. Now, with two fierce competitors battling for dominance, “things could become quite interesting,” inside sources recently told Reuters. Negotiations are still ongoing and there is no deadline per se, they said, although Flipkart itself seems to continue favouring the deal with Walmart: joining forces with the predominantly brick-and-mortar American retailer would help the company put into practice its plans for a new physical chain in India.
Much is left to speculation, however: Amazon, Walmart and Flipkart all refuse to comment in any official capacity on what could well become one of the most important e-commerce deals of the year.