May 9, 2018
Walmart has emerged triumphant in the retail war to acquire a majority stake in Flipkart. On Wednesday, the company gained 77% ownership of the India-based ecommerce site in a $16 billion deal.
Walmart, known for its big-box format and low prices, isn’t perceived to have the ecommerce expertise of Amazon. For the past few years, Walmart has been playing catch-up in the US with acquisitions of online retailers like Moosejaw, Jet.com, Bonobos and ModCloth.
This is a risky move financially for Walmart. In a presentation the company said the Flipkart acquisition would reduce its net income by $750 million in 2018. To put the Flipkart deal in perspective, Jet.com was bought for $3.3 billion in 2016.
Flipkart won’t add any ecommerce prowess in the US, but it could help Walmart stave off Amazon to become instantly competitive in India and grow international revenues. Walmart has retail stores in 28 countries and ecommerce sites in 11 countries, and international revenues totaled $116.1 billion in 2017. But international revenues have posted negative growth rates since 2015.
Sourced through Scoop.it from: retail.emarketer.com
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