Walmart, Flipkart may gang up on Amazon: 27-Sep-2016

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The world’s biggest retailer Walmart Stores Inc is exploring an equity partnership with Flipkart to take on common rival Amazon in India, two persons directly aware of the development said. The companies are engaged in early talks and a meeting is scheduled this week that will include discussions on Walmart picking up a minority stake in India’s largest ecommerce company, the persons said.

One of the persons said Walmart is likely to discuss a “strategic deal” with Flipkart similar to the one the US retail titan forged with JD.com in China. In June, Walmart acquired a 5% stake in the second-largest Chinese ecommerce marketplace for about $1.5 billion. It’s unclear what stake Walmart would acquire in Flipkart and at what price. A deal would help bolster Flipkart as it seeks to fight a generously funded Amazon. For its part, Walmart would get a firm foothold in India’s ecommerce market.

“As a policy, we don’t comment on speculative reports,” a Walmart spokesperson said in an email. A Flipkart spokesperson said, “It is our policy not to comment on rumours or speculations.”

An alliance will allow Flipkart to leverage Walmart’s famed global supply chain and increase efficiency in procurement, product assortment and further improve its technology platform. Walmart’s Best Price wholesale stores that are present in Jammu, Chandigarh, Guntur, Lucknow and Agra among other locations could conceivably be used as pickup and delivery points. The company could gain a foothold into India’s largest ecommerce company, a presence that would have taken Walmart years to build. This will also fulfil the US company’s omni-channel strategy of selling goods through various
channels.

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