Future Group stocks lap up Biyani cues, rally up to 17%

Ismael LynchMay 12, 2018

And in March, Walmart said it would expand its home grocery delivery to 100 USA cities.

"While Amazon has AmazonNow, Flipkart would like to tap Walmart's supply chain expertise in building up its Grocery offerings".

F Flipkart was founded in 2007 by the former Amazon executive Sachin Bansal along with its IITian batch mate Binny Bansal. That includes its decision last month to sell its British unit, Asda, which primarily operated a chain of traditional supermarkets.

According to the deal, Walmart's investment is in Flipkart's online marketplace platform, where foreign investment is allowed.

Flipkart had net sales of $4.6 billion in its latest fiscal year. Amazon clearly emerged the victor, with its revenue growing at a compounded annual growth rate of 28 percent. "Plans are on track", Walmart India president and CEO Krish Iyer said at the roundtable.

Since the profit is made from shares that were held for more than two years, it would attract a long-term capital gains tax of 20 per cent plus surcharge and education cess, effectively wiping away a fourth of the profit.

The investment will help accelerate Flipkart's mission to transform ecommerce in India through technology and is one in the eye for Amazon, a would be early suitor for FlipKart.

The Bangalore-based company has acquired a string of other companies in recent years, from fashion e-commerce company Myntra to mobile payment firm PhonePe.

Amazon had been considering making its own offer for the Indian firm, which has more than 100 million users. Flipkart's logistics arm eKart operates in over 800 cities and makes as many as 5,00,000 deliveries a day. India's retail market, online and offline together, is expected to reach $1 trillion by 2020, according to a 2017 report from industry body Assocham.

At its Best Price wholesale stores in the country, Walmart sells everything from fast-moving consumer goods to furniture to other retailers and institutions.

Walmart will also bring in vast offline organised retail expertise, which will help Flipkart create a complementary online-offline business which in turn can help handset brands expand the market by going into the smallest towns and cities. Kalyan Krishnamurthy will continue to be the CEO of the company, while co-founder Binny Bansal will be the Group CEO of Flipkart. The acquisition surpasses Walmart's $10.8 billion deal to buy Britain's Asda in 1999 and its acquisition two years ago of online retailer Jet.com for more than $3 billion.

Although many sellers that TechCircle spoke to are excited about the global market opportunities and sourcing afforded by the Walmart deal, some are equally wary of the USA retailer's global strategy to rebrand and sell white-label products, and to aggressively supply its own private labels. "We believe there is huge growth potential for e-commerce in India and significant opportunity for multiple players to succeed in India's diverse, domestic market", the company stated.

A player like Walmart, which can keep pumping patient capital for a long period of time, could be the flawless bulwark against the might of Amazon.

Small businesses and traders are considered an important political constituency of the BJP.

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