New Delhi: Putting months of speculation to an end, American retail major Walmart earlier in the day confirmed that it would be acquiring a significant stake in Indian e-commerce major, Flipkart Group.
While reports of the deal have been surfacing time and again in the recent past, the American multinational announced that it would acquire 77 per cent stake in Flipkart against an initial payment of USD 16 billion (over 1 lakh crore).
With the deal in place, Walmart aims to serve customers, support job creation, small businesses, farmers, and women entrepreneurs, while backing Flipkart's ambition to transition into a publicly-listed, majority-owned subsidiary in the future.
As per the company, India's e-commerce industry is projected to grow four times faster than total retail through 2023, with a millennial population of 443 million and a growing middle class.
With this in mind, Walmart aims to channelise investments towards leveraging the advantages offered, including a sum of USD 2 billion new equity to accelerate Flipkart's growth.
As Walmart scales in India, the company will continue to partner to create sustained economic growth across agriculture, food, and retail. On the forefront, the company is looking at extensive job creation through development of supply chains, commercial opportunity, and direct employment.
Furthermore, the retail major plans to support small businesses and 'Make in India,' through direct procurement as well as increased opportunities for exports through global sourcing and e-commerce.
Among other initiatives, Walmart will partner with Kirana store owners and members to help modernise their retail practices and adopt digital payment technologies. They will also support farmers and develop supply chains through local sourcing and improved market access.
On a related note, Walmart currently operates 21 Best Price cash-and-carry stores and one fulfilment centre in 19 cities across nine states in India, with more than 95 percent of sourcing coming from within the country itself.