LIVEMINT: Flipkart dialled Amazon after Walmart revived deal talks
LIVEMINT: India’s leading e-commerce firm Flipkart reached out to global internet giant Amazon.com Inc. for a potential sale less than a year after its chairman said India needs to follow the Chinese example of promoting local companies over foreign ones, two people familiar with the matter said.
In December 2016, Flipkart chairman Sachin Bansal had called for a level-playing field for Indian start-ups to compete effectively against global companies. “…What we need to do is what at some level China did. They told the world that we need your capital but we don’t need your companies,” said Bansal, implying India should welcome financial investors but favour local start-ups over foreign companies that want to have their own operations here.
Flipkart dialled Amazon after Walmart revived talks for a potential investment, the two people cited above said on condition of anonymity. In late 2016, initial talks between Walmart and Flipkart stalled and Flipkart went on to raise $3 billion in two rounds of funds from Tencent, SoftBank, eBay and Microsoft.
The potential Flipkart sale has few precedents, even globally. But even in the US, both Amazon and Walmart have shown they are willing to do things they didn’t do earlier in order to win.
Walmart bought online retailer Jet.com for $3 billion in August 2016 to accelerate its online push. Less than a year later, Amazon surprised the world by buying offline retail chain Whole Foods for as much as $13.7 billion.
A buyout of Flipkart by either Walmart or Amazon will make India a key battlefront in the fight between the two American retail giants. India’s e-commerce market touched $17.8 billion last year and is expected to grow to more than $28 billion this year, according to RedSeer Consulting.
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