Reasons must feel like the Belle of the ball e-Commerce.
India, Indian e-Commerce market, “approved the agreement to sell approximately 75 percent of the company to Walmart of ink -.led a group of approximately 15 billion dollars,” according to Bloomberg. Last year India was $ 3.1 billion.income.
Walmart said that it had nothing to say.
This happens a day after CNBC reported that Amazon not only offered to buy a controlling stake in the company, but he also proposed a breakup fee in the amount of $ 2 billion and a non-compete. The previous sentence Walmart, rumored to be around $10-$12 billion. Alphabet Inc. also reportedly involved in the transaction, investing $ 3 billion.
Sucharita Kodali, Vice President and principal analyst at Forrester, called him a hefty price to pay, but said it was done in the spirit of the believers of India is the next China.
“I think it’s a Pyrrhic victory for Walmart,” said Kodali. “India is a tough market, and flipkart now has to spend a lot in order to effectively compete with Amazon”.
Competition between the two companies continues to heat up, the analysts indicate on the posted suggestions and the interest of Amazon in India as the necessary funds to continue to grow (and the size of the Indian market is not affected). Walmart currently has around 11,700 retail stores in 28 countries; currently, Amazon only in 13 countries.
Kodali said that because of the desire of Amazon is a big hit in India, she suspects that there was “war and madness”, to seal the deal. “It’s quite difficult as an outsider as a foreign company and the owner of 100 percent of everything,” she explained. “The reasons that buying their market share and makes it easier to deal with any issues of compliance that relate to foreign investment.”
According to the Indian Foundation of brand equity, by 2020, the retail market of India will increase by 60% and reached $1.1 trillion. In addition, the country is expected to become the fastest growing e-Commerce market, e-Commerce sales are expected to jump from $30 billion in 2016 to $ 120 billion by 2020. When a nation has 530 million buyers—it is expected that, by 2025, it’s not hard to understand why, as Amazon and Walmart, want to plant their flags.
It is also an opportunity for Amazon to grow its core business in India. In the company’s annual letter to shareholders, Amazon CEO Jeff Bezos said that the Prime Minister of India “more than 40 million of local goods from third-party sellers” and that the program added more items in its first year in India than in any other regions. Bezos also wrote that the company “is a dynamically developing market in India.”
But now, if walmart makes a substantial obstacle in the road, Amazon will need a plan B.
Additional reporting by Lisa Lacey.