Seeking Prime Minister Narendra Modi's intervention, the co-convener of SJM Ashwani Mahajan said, "The SJM, RSS and BJP have a consensus that Foreign Direct Investment (FDI) in multi-brand retail will not only kill entrepreneurship, is anti-farmer and will kill job creation opportunities and has been rightly kept out". Amazon needs to succeed in another high-growth market to prove it can effectively replicate its model beyond North America, and it has been aggressively expanding in India. "Flipkart has established itself as a prominent player with a strong, entrepreneurial leadership team that is a good cultural fit with Walmart", said Judith McKenna, president and chief executive officer of Walmart International.
Accel, one of the first investors in Flipkart, has earned a sevenfold return, including a 71-times return with its Accel India Fund.
Walmart shares ended the US Wednesday trading session 3.13% lower at $83.06.
On wednesday at the employee town hall, employees of Flipkart were in cheer when the co-founder Binny Bansal announced a 100 per cent buyback of vested ESOPs (employee stock options). Fashion was the only category in which Flipkart maintained a significant edge.
According to Forrester Data, the Indian online retail market is around $20 billion in 2017 (2.4% of total retail market in India), which is still relatively small when compared to the penetration rates of other mature markets. "And it fits right in with our strategy", Judith McKenna, Walmart's worldwide chief executive officer, said in a phone interview. This investment definitely opens new doors for the company in India.
"I believe it (the deal) will create a rumble in the industry". After working for e-commerce giant Amazon, the two friends set up Flipkart. India is the next big potential prize after the USA and China, where foreign retailers have made little progress against Alibaba Group Holding Ltd.
Flipkart and Walmart are officially in business together, with the pair finally announcing their partnership after months of will-they-won't they.
Jared Wiesel, partner at the tech-enabled consulting firm Revenue Analytics, said Walmart - which has traditionally operated physical stores - would also benefit from Flipkart's technological expertise.
The development amid buzz that rival Flipkart is close to sealing a mega deal worth over United States dollars 12 billion with USA based retail giant Walmart.
Last month, the company agreed to cede control of its United Kingdom grocery chain, Asda, merging it with British rival J Sainsbury Plc.
Lee also expects the competition getting aggressive as Amazon counter-offered Walmart for a stake in Flipkart. Flipkart has 34 per cent market share while Amazon controls 27 per cent of Indias online sales.