May 9. 2018


After weeks of speculation, Walmart announced it will become the biggest shareholder in the Indian eCommerce retailer Flipkart. Walmart will invest USD 16 billion for a 77% initial stake, with the rest of the business held by Flipkart co-founder Binny Bansal, Tencent, Tiger Global, and Microsoft.

Flipkart is the leading eCommerce marketplace in India, and currently ranks as the second-biggest retailer in the country, with net sales for the latest fiscal year (ended March 31) of USD 4.6 billion and GMV of USD 7.5 billion. Both figures posted 50% growth this year. The retailer operates a structured first party/third party B2C eCommerce platform, including a dedicated fashion business, a logistics business, and a payments business (more on all of those below). Among the rest of the Indian marketplace, Amazon ranks fifth, while Walmart ranks fifteenth.

The move is just Walmart’s latest in what has become an active year in the retailer’s international business, with the appointment of a new international head in Judith McKenna in February, and just last week in the retailer’s divestment of the majority share of its UK-based ASDA business. Walmart’s stake in Flipkart significantly expands the retailer’s presence in a rapidly-changing, high-potential market. But it’s more than simply “planting a flag” in yet another country, and rather reflects Walmart’s more focused global strategy, to drive returns from its reliable scale (North American stores) and find and build growth and innovation elsewhere (eCommerce, China, India). The partnership with an established player also points to how hard it can be to penetrate another international market. Retail is still very regional, even online, and having a local partner to help navigate is clearly important.


What else can suppliers and Walmart’s business partners—as well as investors—expect from this latest move from Walmart to invest more heavily in its long-term future? And what does this mean for the Indian retail marketplace as a whole—and eCommerce in particular?

When it comes to payments, as the cashless economy grows, mobile banking apps and mobile wallets will benefit the most due to lack of infrastructure to support card payments in rural areas. Walmart’s investment in Flipkart gives them expertise in two key areas required to crack eCommerce in India – mobile and payment solutions. As the Indian economy is still highly cash-centric, with around 68% of transactions made in cash, Walmart will now be able to get embedded early on as shoppers evolve their everyday purchasing behavior.


Walmart will also be able to assert its expertise in online grocery as eCommerce in India grows (for now, given the dominance of traditional retail and the complexities of food distribution, online players largely concentrate in selling general merchandise). Walmart brings with it invaluable knowledge of India’s supply chain through its years of running cash and carry operations there, as well as global expertise in grocery eCommerce. This will aid Flipkart’s efforts in experimenting with online grocery retail with a service it calls Supermart, aimed at the millennial generation. Walmart is also likely to bring learnings from China to the Indian marketplace, especially in how eCommerce giants in China are modernizing traditional retail – such as Alibaba’s comparatively modest plan to convert 10,000 mom-and-pop shops to a Tmall-branded network of outlets, with the potential to transform the six million convenience stores all over mainland China. Applying this approach to India, Walmart could not only create superior logistical capabilities to rivals, but begin modernizing retail in the country at an accelerated pace, especially benefitting online grocery.

At the same time, Walmart’s investment in Flipkart will certainly help cement leadership credentials in non-food – especially apparel.

Look for more on this deal from our global insights team in the next few days. In the meantime, for more insight on: