Industry News

Flipkart's Main Investors Agrees to Sell Stake to Walmart

India Teleshopping Market

The key investors in India's biggest online retailer Flipkart have consented to offer their stakes in the Bengaluru-based organization to Walmart yet the greatest of them. SoftBank, is waiting for a better price.

India: As the due date for Walmart-Flipkart bargain inches closer, main investors in Flipkart, aside from SoftBank, have consented to offer their stakes in the organization.

Walmart has achieved a concession to purchasing the stakes of New York-based speculation firm Tiger Global Management, South African media aggregate Naspers, investment firm Accel and China's Tencent Holdings. Flipkart’s founders, Sachin Bansal and Binny Bansal, may offer a piece of their stake in the organization. These six shareholders hold over 55% of Flipkart. SoftBank, the greatest partner at 20%, is looking for a better deal, evaluated at $15-17 billion.  

SoftBank had put $2.5 billion in Flipkart in August a year ago through its $100 billion Vision Fund, at the time the biggest private investment in India's consumer online sector. SoftBank has remained generally frosty to suggestions made by Walmart, which is accepted to have offered a $10-12 billion valuation to buy the offers held by the Tokyo-headquartered investors. The discussions with SoftBank are still going on and it is indistinct whether SoftBank will continue talks should Walmart manage to settle a deal with the other shareholders.

Furthermore, sources likewise said that Amazon, for which India is a basic market, has additionally tossed its cap into the ring for Flipkart and is accepted to be in chats with a few of its investors, including SoftBank.

On the other hand, eBay, which has a stake in Flipkart, had additionally not agreed to an arrangement with Walmart in view of its business agreements with the Indian stage. This gives traders who offer on Flipkart access to more than 150 million clients from eBay around the world. But, Lately, filings of Flipkart discovered that the company posted losses of $1.3 Billion with $3.09 Billion revenues last year. So, this can be a better point for Walmart to strike a deal with eBay about why the deal makes sense in the short term, in addition to the long term.

According to the terms of Walmart's investment agreement in Flipkart, which is expected to change the substance of India's shopper web, innovation and retail enterprises, the essential venture will esteem the Bengaluru-based organization at about $20-22 billion, near a 100% ascent from the $10.2-billion valuation it got in April 2017, preceding it brought supports up in a round drove by Chinese web mammoth Tencent, which then esteemed it at $14.2 billion.

According to TechSci Research, Flipkart is world’s third-most funded private company and one of the most fruitful Indian e-commerce startups. Walmart has an unimportant nearness in the evaluated $670 billion retail showcase in India with a small 21 discount stores, while it has no nearness in the e-commerce space. The organization has been making a decent attempt to make its essence felt in the online retail advertise since 2014 and including Flipkart will enable it to grow its impression in India. If the deal falls into place, it is probably going to fortify Walmart's situation against Amazon, by helping it use the huge market Flipkart considers.

Moreover, Flipkart to Indians is much like Amazon and is the largest e-commerce business organization. Amazon, then again is the second greatest. Flipkart has overtaken the impression of Snapdeal and other web-based business organizations in India inside 10 years and is ahead of others including Amazon. Justifiably, Amazon stands to profit if it prevails with regards to getting a significant stake in Flipkart and it will likewise end the competition between the two organizations in India. Walmart, then again, too will profit as it is endeavoring hard to rival its greatest opponent Amazon in the internet business space.

According to the recently published report by TechSci Research, India E-Commerce Market Forecast and Opportunities, 2020, the country’s e-commerce market is projected to grow at a CAGR of more than 36% during 2015-2020. E-services segment, which comprises online travel, online payments, online classifieds, etc., is expected to continue its domination through 2020. However, the e-tail segment that includes electronics, apparels & accessories, health and personal care, etc., is expected to witness significantly higher market growth compared to e-services segment over the next five years. During 2015-20, the western region is expected to remain the largest e-commerce market in the country. Major players operating in India’s e-tail market include Flipkart, Snapdeal and Amazon. The country’s e-commerce market is forecast to witness staggering growth on the back of increasing working population and growing number of middle class households, which is expected to reach around 53 million by the end of 2015 and is further anticipated to double by 2025.

According to the recently published report by TechSci Research, India Online Grocery Market By Product Type (Food Grains; Bread, Bakery & Dairy Products; Fruits & Vegetables; Personal Care; Dry & Baking Products; Products; Beverages; etc.), Consumer Behaviour, Competition Forecast and Opportunities, 2011 – 2021, the online grocery market in India is projected to grow at a CAGR of 55% during 2016 – 2021. In 2015, among all the products being offered by various e-grocers, food grains accounted for the lion’s share in the overall market, followed by bread, bakery and dairy products. Region-wise, the southern region dominated the country’s online grocery market in 2015 because of increasing number of hi-tech cities in the region coupled with higher awareness among consumers. Few of the leading players operating in the India online grocery market include BigBasket, Grofers and Papertap, among others.

According to the recently published report by TechSci Research, India Teleshopping Market, By Operation Type (Infomercials & Dedicated Channels), By Category, By Payment Mode (Cash on Delivery, Net Banking, Mobile Wallet, etc.), By Source of Order (Television & Internet), Competition Forecast & Opportunities, 2023, India teleshopping market stood around $ 282 million in 2017 and is forecast to grow at a CAGR of around 13% to surpass $ 613 million by 2023, on account of increasing disposable income along with better discounts & offers in comparison to e-commerce websites. Moreover, expanding television penetration in rural areas and rising number of dedicated channels for teleshopping are further expected to aid the growth of teleshopping market in the country through the forecast period.

Please follow our LinkedIn and Twitter pages to get live updates on market research insights and analysis.


Relevant Reports

Relevant News