Walmart- Flipkart Deal Will Help Job Creation In India

Friday, 11 May, 2018

And, in 2018, Flipkart joined Walmart, when Walmart Inc announced on 9 May it had signed definitive agreements to become the largest shareholder in Flipkart Group.

Experts state that when markets consolidate, price competitiveness starts to reduce and end-consumers stop getting the value that they used to get earlier.

Amazon has been increasing its footprint in groceries, and its tech-minded approach is forcing most grocers to adapt in an increasingly competitive environment. While the first phase was dominated by hyper-competition, extreme growth and the battle for gaining market share at any cost, it also led to a lot of players betting on wrong business models. Walmart has tried to enter the Indian market since ages but strict FDI rules kept its presence limited to just retail stores. There will be an uneven level playing field to the disadvantage of retail traders. At that time, both eBay and Flipkart, also entered into commercial agreements meant to boost cross-border trade for both companies.

"The owner can dictate anything". However, Walmart will maintain a clear majority ownership in the company.

The deal is subject to regulatory approval in India. Second important aspect is that the Owner can squeeze and dictate anything and as such being the virtual owner, the Walmart will always be in a position to dictate its terms and conditions.Thirdly, it is much more hard for the Govt to control & regulate foreign owned platforms particularly in e commerce sector which has no boundaries.

The Left party said that this would destroy the retail trade sector, which directly employs more than four crore people. Here are a few pointers about the Flipkart Walmart deal that you must know.

He said Flipkart would be run as a board managed company with Walmart acting as a resource centre.

Trilegal, another top Indian firm, is advising Cape Town-based Naspers on the sale of its 11% stake in Flipkart, a move that Bloomberg reports will earn Africa's largest company a cool $1.6bn.

Walmart said Flipkart's logistics, payments and apparel businesses offer new areas of growth.

New York-based investment firm Tiger Global is to reap profits of $3 billion on a total investment of about $1 billion. Softbank CEO Masayoshi Son announced that this was the biggest deal in the e-commerce space, and had the power to topple the entire landscape not only in India but around the world.

Flipkart had bought back about Dollars 100 million worth ESOPs at USD 85.2 per unit after the deal with SoftBank a year ago under which latter invest USD 2.5 billion in the e-tailer.

But with one founder exiting, Flipkart won't ever be the same again.

For most employees, the larger question is how this acquisition is going to settle things down in Flipkart.

Jaideep Hansraj, CEO, wealth management and priority banking at Kotak Mahindra Bank, said that while the allocation of funds will depend on the investment profile of the individuals and their risk appetite, the equity allocation should ideally be 100 minus the person's age; lower the age, higher the equity allocation.