Can Walmart Halt The Slide Of Flipkart After The Bansals' Exit?

How can Walmart correct the wobble in India's best known start-up?

- Goutam Das and Rukmini Rao

The Flipkart story, which started with selling books in 2007, comes to an abrupt end in 2016. On its website, that is. The milestone years are plotted like a rising line graph with geo-tag icons. 2010: India’s best-known start-up introduced cash on delivery, rocket launching e-commerce in a country that did not trust online payments. 2014: it bagged its first billion dollar-funding and acquired fashion e-tailer Myntra. 2016: it crossed 100 million registered customers.

The rest of the graph, if completed, would look equally spectacular. 2017: Flipkart raised nearly $4 billion. 2018: the world’s largest company by revenues, Walmart, paid $16 billion to buy 77 per cent stake — nearly $13 billion more than what it paid for Jet.com, its last major e-commerce acquisition; $5.5 billion more than its consolidated net income for fiscal 2018; $6 billion more than its capital expenditure on stores, e-commerce, technology and supply chain for the entire year; and $1.6 billion more than what it returned to shareholders through dividends and share repurchases during the year.

What did Doug McMillon, President and CEO of Walmart, foresee that other corporations did not?

Certainly not Binny Bansal, Co-founder of Flipkart, resigning within three months of the acquisition closing, after an investigation into allegations of “serious personal misconduct”. The investigation did not yield enough evidence but found “lapses in judgement, particularly a lack of transparency, related to how Binny responded to the situation”. This spooked some investors.

Edward Kelly, a Wells Fargo analyst, popped the question during Walmart’s third-quarter earnings call on November 15. “Should we be concerned at all? Maybe any colour on the strength of the bench within that business?”