Walmart-flipkart $16 bn deal all your important questions answered here business standard news p gasol stats

Before the deal went through, Amazon had expressed its interest in making a competing offer. Citing Euromonitor, Reuters reports that Amazon holds about 27 per cent of India’s burgeoning e-commerce market. According to the same source, Walmart only operates 21 cash-and-carry wholesale stores, which sell to businesses, in the country.

Years before Amazon debuted in India, Walmart entered the country’s market in 2007 through a joint venture with a local company, said the report. However, that joint venture was called off in 2013. Its presence in India, the report added, has remained largely static. This is partly due to restrictions in the country regarding foreign investment in physical retail.

For Walmart, which according to the report has renewed its focus in key international markets in a bid to catch up with rivals, the Flipkart deal comes after the company retreated from Britain after selling a controlling stake in its British arm ASDA to J Sainsbury Plc.

1) How big is the deal in dollar terms? Walmart will pay $16 billion for a roughly 77 per cent stake in Flipkart. According to Reuters, Walmart has said that it plans to fund the Flipkart deal through a combination of newly-issued debt and cash on hand. The investment will also include $2 billion of new equity funding.

In an investor call, Doug McMillon, president and chief executive officer of Walmart, made it clear that Flipkart, which has done well over the last few quarters, would help it learn about the ecosystem. "We want to get the learnings from Flipkart and take it to other parts of the world," he said.

Walmart has listed benefits such as Flipkart’s push towards artificial intelligence (AI), vast user data and customer profiles, and even its payments platform PhonePe as the main reason for this acquisition. According to the report, industry insiders believe that Walmart will be inheriting a wholesome ever-expanding ecosystem of e-commerce and services, which will rival that of Amazon.

3) What does Flipkart get out of the Walmart deal? Flipkart co-founder Binny Bansal said Walmart is the ideal partner for the next phase of Flipkart’s journey as he saw e-commerce having great potential to grow from its current status of being a relatively small part of retail in India.

5) What happens to the Flipkart brand now? Walmart and Flipkart will remain separate brands, according to agency reports. Further, the Indian e-commerce company will have an independent board. However, the board will be revamped to give representation to the US firm.

7) What about Flipkart’s founders, are they staying onboard? Binny Bansal, who co-founded Flipkart with Sachin Bansal 11 years ago, will retain his 5.5 per cent stake in the company and will be chairman of the company’s board, according to news agencies.

"I’ll be taking some long time off and focus on finishing a few personal projects which I haven’t been able to find time for. Will catch up on gaming (and see what kids are playing these days) and brush up on my coding skills," Bansal said in a Facebook post.

The Confederation of All India Traders (CAIT), a traders’ lobby group, as well as outfits affiliated to the Rashtriya Swayamsevak Sangh (RSS), sought Prime Minister Narendra Modi’s intervention. They warned that they might hit the streets if their concerns were not addressed.

9) What about Amazon, it the global e-commerce giant concerned? It is unlikely that Amazon is going to hold back from investing more and growing its business in India, Alnoor Peermohamed writes for the Business Standard. Amazon CEO Jeff Bezos has already committed to investing $5.5 billion to win in the country. Amit Agarwal, head of Amazon India, has said this figure is just a placeholder until the company sees the need to invest more.

10) What else is Walmart doing in India? A day after announcing the $16-billion investment in Flipkart, Walmart Inc on Thursday said it will continue to grow its wholesale cash-and-carry business, adding 50 new stores in the next four-five years. "We currently have 21 stores and plan to open 50 stores in 4 to 5 years. Plans are on track," Walmart India President and CEO Krish Iyer said at a select media roundtable called to explain the Flipkart deal. This copy has been updated to correct an error with regard to the CEO’s role after the deal