Google’s parent to be a part of Walmart-Flipkart deal

Googletgeditor

Walmart, the US-based retail giant is apparently in talks with Google’s parent Alphabet to acquire a minority stake in Flipkart, India’s largest e-tailer. As indicated by media reports, the tech giant is probably to invest $1-2 billion after the Walmart acquisition.

As part of a partnership formed in the US last year, Walmart products are sold on Google Express, its online shopping mall. Google also sells Walmart products through Google Assistant on Google Home, its voice-controlled speaker. Walmart customers have the option of linking their accounts to Google.

The alliance of world’s two biggest corporations is being seen as an attempt to challenge Amazon’s booming retail businessover the world and is expected to bring significant changes towards the voice-based shopping experience in the future.

Walmart would be able to offer a better shopping experience for its customers through Google Assistant, the AI-enabled software which is accessible on Android smartphones. Additionally, it will able to recommend items on the basis of past orders.

Walmart is preparing to buy a majority stake in Flipkart, and the deal is probably going to be finalized by the end of this month.

Early investors of Flipkart, including Tiger Global, Accel and Naspers are expected to sell their entire stakes in Flipkart to Walmart if a deal is materialized.

As per several media reports, earlier, Masayoshi Son-led SoftBank Group, which owns around 20%  stake in Flipkart through its Vision Fund, was reluctant to sell a part of its stake as Walmart was offering to buy existing shares at a price of $12 billion, a price the Japanese tech investor considered low. In last August, Japan’s SoftBank purchased a 20% stake in Flipkart for $2.5 billion through its $100 billion technology-focused Vision Fund. It was the biggest ever private investment in an Indian tech firm at the time.

Walmart and Flipkart, both will be benefited if this long-speculated deal goes through. By combining their capabilities they will be stronger to compete against Amazon, through online as well as offline retail channels. Also, Walmart gets the chance to grab a foothold in India’s flourishing e-commerce industry.

In the meantime, along with strengthening its financial position Flipkart also fortifying its supply chain and improving efficiency in procurement, product assortment and retailing. Flipkart, India’s leading e-tailer, has been anticipating to open retail stores across India for a long time but has been waiting for the right investment partner. For that reason, the Walmart-Flipkart partnership as of now appears as a match made in heaven.

(Source: http://www.businesstoday.in)

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