- Walmart values 11-year-old Flipkart at $20.8 billion
- Sachin Bansal, co-founder of Flipkart, will exit the company
- SoftBank will also exit the company by selling its 20% stake
India's first billion-dollar e-commerce company, Flipkart, sells 8 million products across 80-plus categories. It has 100 million registered users.
SoftBank Group chief executive Masayoshi Son had earlier said that its investment in the Indian online marketplace had almost doubled. Other major investors in Flipkart include Tiger Global, Naspers and Accel while the Bansals own just over 5 per cent each of the company, according to data from business intelligence platform paper.vc.
Last year, Kalyan Krishnamurthy, previously an executive in Flipkart investor Tiger Global, took over as Flipkart CEO. Binny Bansal became CEO of the whole group, which includes fashion portals Myntra-Jabong, payments unit PhonePe and logistics firm Ekart.
India's e-commerce market is tipped to grow to $200 billion in a decade, according to global financial services company Morgan Stanley, as cheap mobile data makes online shopping increasingly accessible. Flipkart, which is competing with Amazon.com Inc for market share in India's e-commerce market, gained online fashion market dominance with the 2014 acquisition of Myntra, which subsequently bought rival Jabong.
Meanwhile, Amazon - Flipkart's biggest rival in India - has committed to invest over $5 billion in India.
Flipkart will also benefit from deep pockets of Walmart as well as the US retail giant's decades of retailing expertise in skills from logistics to marketing.
Walmart had entered India in 2009 through a joint venture with Bharti Enterprises and later took full control of that venture in 2013. It currently operates about 20 wholesale stores in the country that serve small businesses.
Ajay Srinivasan, director, CRISIL Research, said, "The deal indicates the attractiveness of India's consumption market for global majors. With Walmart acquiring stake in Flipkart, we expect enhanced thrust on the online grocery segment. We expect online grocery to be the fastest growing segment in the e-retail space, growing at a 65-70 per cent CAGR to touch Rs 100 billion in revenues by fiscal 2020." (With agency inputs)