Walmart acquires Flipkart

Walmart takes over Flipkart

If you watch the news on a regular basis there is no doubt that you have heard about the takeover of Flipkart by Walmart. The American supermarket giant has always tried to gain a foothold in the e-commerce sector. This takeover might be all it needs to conquer the Asian market e-commerce sector. On the American market it is obvious that Walmart has actually been outfoxed by Amazon.

Why did Walmart buy Flipkart

The first thing in understanding the largest e-commerce deal is to understand the main reason why Walmart purchased Flipkart. Let us remember that Flipkart if the largest e-commerce company in India. On Wednesday the 9^th of May 2018 Walmart acquired 77% of Flipkart. There is a reason why Amazon specifically decided to purchase Flipkart. At the beginning it starts with the large Indian population. India is actually the most populated country in the world after China. It is one of the only two countries to have a population which is more than 1 billion. All that population means nothing if it does not have a middle-class to purchase the products. The shifting behavior of Indian buyers is another reason that has lead Walmart to acquire Flipkart.
India’s growing middle class and attitude towards e-commerce are fuelling household spending to an all-time high. India’s household spending is going to eclipse that of China. Its spending is growing faster than more mature markets like the United States. The brick and mortar retail market in India is fragmented. This has led to the everyday shopper to depend on e-commerce for a wide range of products. In simple terms there is a wide range of goods on Flipkart or Amazon than in an Indian mall. In the year 2017 the Indian consumers spent $21 billion on online purchases. This makes India the 10^th largest market in terms of the e-commerce market in the world. This will make Flipkart valuable to both Amazon and Walmart.

Further reasons to buy Flipkart

The potential as a result of acquiring Flipkart is massive. Amazon posted a global e-commerce revenue of $108 billion dollars. Walmart on the other hand only received e-commerce sales of $17 billion. Flipkart is the current market leader in India, therefore this will boost Walmart’s online sales. India is also now the most important online sales market outside of the United States. This makes Flipkart very important if Walmart is going to compete with Amazon.