Walmart, the U.S. retail giant, has increased its stakes in Indian e-commerce giant Flipkart by acquiring shares worth $1.4 billion from hedge fund Tiger Global, as reported by The Wall Street Journal.
This move solidifies Walmart’s position in the rapidly growing Indian consumer market. With India projected to extend its lead as the world’s most populous country by 2050, the country offers immense potential for retailers.
In 2018, Walmart purchased a 77% stake in Flipkart for $16 billion. However, recent transactions have reduced its stake to approximately 75%. The current deal values Flipkart at $35 billion, slightly lower than its previous valuation of $38 billion when it sold shares in 2021.
Recognizing the opportunities in India, major U.S. tech companies have also made significant moves in the country. Apple, for example, opened its first two stores in India this year, with CEO Tim Cook personally involved in the launch.
Similarly, Amazon’s cloud computing unit announced plans to invest $12.7 billion in India by 2030 to meet the growing demand for cloud services. This new commitment will bring Amazon Web Services’ total investment in India to $16.4 billion.
While Amazon continues to dominate globally, Flipkart has gained an upper hand over its U.S. rival in the Indian market. In 2020, Flipkart claimed a market share of 48%, surpassing Amazon’s 26%, according to research firm Redseer Strategy.
Walmart’s initial purchase of a 77% stake in Flipkart may have seemed costly at the time, but it has proven to be a successful investment, leading to further acquisitions.
Walmart has not yet provided any comments on the recent transaction.
By Callum Keown