MAKING A KILLING WITH FLIPKART

The home-grown ecommerce company is at the centre of Walmart’s growth plans.

- BY RUKMINI RAO

IN MAY 2018, when Walmart Inc., the world’s No.1 retailer, bought a 77% stake in Flipkart, the $16 billion it paid was a record purchase price for any ecommerce company worldwide. Flipkart, founded in 2007 by Sachin and Binny Bansal, was backed by leading global investors Tencent Holdings Ltd., Tiger Global Management LLC, and Microsoft Corp.

The acquisition worked. By December 2023, Walmart had increased its stake to 81% and is preparing to list Flipkart.

An earlier Walmart initiative had not. Walmart has been in India for over two decades, beginning by buying assorted items for its stores worldwide from an outpost in Bangalore in 2002 when it was Wal-Mart Stores, Inc., and India’s tech capital was yet to become Bengaluru. Since then, it has sourced products worth around $30 billion. Its target is $10 billion a year from 2027.

In 2007, it joined hands with Bharti Enterprises, then India’s largest telecom operator, to launch a wholesale food and grocery business. German giant Metro AG’s Metro Cash & Carry was already there since 2003. The first Walmart-Bharti store came up in Amritsar, Punjab. The hyphen failed, rent asunder by unclear government policies on foreign direct investment in modern retail and competition from small grocers.

This time, the Flipkart acquisition has embedded Walmart (which dropped the hyphen in December 2017) in India’s tech-driven growth story. Kathryn McLay, president and CEO of Walmart International, says that at the core, “Walmart is an omnichannel retailer dedicated to helping people save money and live better.”