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Google's parent Alphabet may partner with Walmart to acquire stake in Flipkart: report

Google's parent Alphabet is reportedly in talks with US-based retail behemoth Walmart to acquire a minority stake in India's largest e-tailer Flipkart.

twitter-logo BusinessToday.In        Last Updated: April 27, 2018  | 15:24 IST
Google's parent Alphabet may partner with Walmart to acquire stake in Flipkart: report

Walmart may not be going solo to acquire majority stake in Indian e-commerce giant Flipkart. Google's parent Alphabet is reportedly in talks with US-based retail behemoth to acquire a minority stake in India's largest e-tailer.

According to a report in The Economic Times, the tech giant is likely to invest $1-2 billion after the Walmart acquisition, expected to be announced shortly. Alphabet and the brick-and-mortar major Walmart already have a partnership in the US since last year.

In US, Walmart products are sold on Google Express, its online shopping mall. Google also sells Walmart products through Google Assistant on Google Home, its voice-controlled speaker which competes with Amazon's Echo. Walmart customers have the option of linking their accounts to Google.

The coming together of world's two biggest corporations is being viewed as an attempt to challenge Amazon's booming retail business across the world. The partnership is also meant to leap into the voice-based shopping experience in future.

Google Assistant, the AI-enabled software found in Android smartphones is expected to enhance shopping experience for Walmart customers. Moreover, the technology giant will also be able to recommend items based on past orders.

Walmart is gearing up to buy a controlling stake in Flipkart, the Indian e-commerce market leader. The deal, which is in its last leg, is likely to be finalised by the end of this month.

Flipkart's early investors like New York-based Tiger Global, Accel and South African internet conglomerate Naspers are likely to sell their entire stakes in Flipkart to Walmart if a deal is reached.

Earlier, Masayoshi Son-led SoftBank Group, which owns about a fifth of Flipkart through its Vision Fund, was reportedly unwilling to sell a part of its stake as Walmart was offering to buy existing shares at a valuation of $12 billion, a price the Japanese tech investor considered low.

Last August, Japan's SoftBank bought a 20 per cent stake in the country's leading etailer for $2.5 billion through its $100 billion technology-focused Vision Fund. It was the biggest ever private investment in an Indian tech firm at the time.

Walmart had earlier completed its due diligence for the Flipkart deal. Both Walmart and India's homegrown e-commerce leader stand to gain much if this long-speculated deal goes through. To begin with, they get to pool resources to compete against a common enemy, Amazon, in online as well as offline retail channels. Walmart also gets to grab a foothold in India's booming e-commerce industry.

Meanwhile, Flipkart stands to not only add financial muscle but also strengthen its supply chain and enhance efficiency in procurement, product assortment and retailing. India's leading e-tailer, besides, has been looking to open retail stores in India for a long time now but has been waiting for the right investment partner. As such, the partnership between Walmart and Flipkart already seems like a match made in heaven.

 

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