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Walmart- Flipkart deal: Why Indian Startups are acquired easily?

On Wednesday, Walmart acquired Flipkart for $16 billion; it is the world’s largest ecommerce deal and the US retail giant has acquired 77% of the Sachin and Binny Bansal Company. 11 year old company is now valued at $20 Billion. But now it is not an Indian company anymore.

Walmart Flipkart deal: Why Indian Startups are acquired easily? 
On Wednesday, Walmart acquired Flipkart for $16 billion; it is the world’s largest ecommerce deal and the US retail giant has acquired 77% of the Sachin and Binny Bansal Company. 11 year old company Flipkart is now valued at $20 Billion. Many giant companies like Amazon and Alibaba showed interest in acquiring more than 50% stakes in Flipkart, but Flipkart at the end was sold to Walmart. The Chinese e-commerce company Alibaba has already backed Indian online payment wallet system, PayTm.  
There is an ongoing battle for Indian e-commerce space; according to global financial services company Morgan Stanley India's e-commerce market is tipped to grow to $200 billion in a decade as cheap mobile data makes online shopping increasingly accessible. This is the major reason why the world has eyes so closely on the Indian e-com space. 
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. In a press release, Walmart said that, “India is one of the attractive retail markets in the world given its size and growth rate. Our investment is an opportunity to partner with a company that is leading in the transformation of e-commerce in the market “. There is an ongoing battle for Indian e-commerce space; according to global financial services company Morgan Stanley India's e-commerce market is tipped to grow to $200 billion in a decade as cheap mobile data makes online shopping increasingly accessible. This is the major reason why the world has eyes so closely on the Indian e-com space. 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. 
In a press release, Walmart said that, “India is one of the attractive retail markets in the world given its size and growth rate. Our investment is an opportunity to partner with a company that is leading in the transformation of e-commerce in the market “. 
Why Indian Startups are acquired so easily? 
Why Indian Startups are acquired so easily? Many people have criticized this deal thorough the China example. Now China has run its internet companies so well that they have made it very difficult for foreign companies to come in and take over their market. Let me give you an example of UBER, this company came into China but did not succeed and therefore had to sell out its businesses in China and had to exit. But in India UBER is giving a tough competition to the Indian Cab service, Ola Cabs. See the difference! 
Again take the example of Amazon, Jeff Bezos also entered the Chinese market and could not do much business in China. Whereas China’s homegrown company Alibaba, it has got so many other e-com joins is set to become the world first trillion dollar company. So, China really promoted its own company allowing foreign money to come in. Whereas India has always has promoted the need of an open market, allowing foreign companies to come in and settle. And that is why Flipkart was sold to Walmart so easily!    
This deal is giving Walmart a very strong foothold in India and the fact that Amazon is the key competitor and moreover Amazon is a company that Walmart has been involved in a better retail battle in the US. For Walmart, the Flipkart deal will offer a big advantage in terms of presence in the Indian e-commerce market.
 Acquiring a stake in Flipkart will help Walmart tap into the India's retail market without building stores. India is the next big potential prize for global retailers after the US and China, where foreign retailers have made little progress against Alibaba Group Holding. Flipkart- Walmart deal is a key to global e-commerce strategy and Walmart clearly doesn't want to be left behind in the race as India is a critical piece. 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.
Walmart Flipkart Deal
Walmart
Flipkart
Alibaba
Amazon
UBER
Indian Startups
E-commerce
Business
International
Sandeep Semwal
Content Writer
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