Walmart Acquiring Flipkart: Let’s Breaking Down What Is Behind This Deal? Readers of this my blog platform sent us thousands of emails this since this morning asked our team why Walmart buying Flipkart an Indian Giant e-commerce company after we published the news last night.
They want to know why an American Tycoon Company as Walmart, the largest chain retailer store in the world has to do such move toward a country like India. Our answer to you is only the smarter investors with experience know that it’s important to do some research to be in the right place at the right moment. This what Walmart by acquiring Flipkart.
Our team breaking down the deal for you to make you understand that Walmart is about to knock down Amazon very soon to become the one online E-commerce in the world, by be in India Walmart getting automatic access to the South Asia, China, the Middle East, in most of the countries in the eastern Europe and all African countries who have good trade agreements with India easy by is geographical and economic positioning.
Now, what is behind the scene of this Amazing deal What Walmart will gain in the deal, low-cost of production, a well-established market to do trade and bypassing many political barriers to sale American product World Wide at a local price. Customer will be able to buy goods and service in the country cheaper than order and waiting for long time delivery from Amazon or Alibaba.
Walmart is changing the e-commerce game today, please read the deal analyzing to understand better.
Let’s Analyse India the country and is value on the Global Market
India’s economic success in recent years has helped to make sure that South Asia is the fastest-growing region in the world but it faces significant challenges along its opportunities for further growth.
India is also the world’s seventh-largest economy, sitting between France and Italy. Its GDP growth recently dipped to 5.7%; still, India is growing faster than any other large economy except for China. By 2050, India’s economy is projected to be the world’s second-largest, behind only China.
India is home to 1.34 billion people – 18% of the world’s population. It will have overtaken China as the world’s most populous country by 2024. It has the world’s largest youth population, but isn’t yet fully capturing this potential demographic dividend – over 30% of India’s youth are NEETs (not in employment, education or training), according to the OECD.
India’s gross domestic product (GDP) at constant prices grew by 7.2 percent in September-December 2017 quarter as per the Central Statistics Organisation (CSO). Corporate earnings in India are expected to grow by 15-20 percent in FY 2018-19 supported by a recovery in capital expenditure, according to JM Financial.
India has retained its place as the third largest startup base in the world with over 4,750 technology startups, with about 1,400 new start-ups being founded in 2016, according to a report by NASSCOM.
India’s labor force is expected to touch 160-170 million by 2020, based on the rate of population growth, increased labor force participation, and higher education enrolment, among other factors, according to a study by ASSOCHAM and Thought Arbitrage Research Institute.
India’s foreign exchange reserves were US$ 422.53 billion in the week up to March 23, 2018, according to data from the RBI.
With the improvement in the economic scenario, there have been various investments in various sectors of the economy. The M&A activity in India increased 53.3 percent to US$ 77.6 billion in 2017 while private equity (PE) deals reached US$ 24.4 billion. Some of the important recent developments in Indian economy are as follows:
- India’s merchandise exports and imports grew 11.02 percent and 21.04 percent on a y-o-y basis to US$ 273.73 billion and US$ 416.87 billion, respectively, during April-February 2017-18.
- India’s Foreign Direct Investment (FDI) inflows reached US$ 208.99 billion during April 2014 – December 2017, with largest contribution from services, computer software, and hardware, telecommunications, construction, trading, and automobiles.
- India’s Index of Industrial Production (IIP) rose 7.5 percent year-on-year in January 2018 while retail inflation reached a four-month low of 4.4 percent in February 2018.
- Employment on the net basis in eight key sectors in India including manufacturing, IT and transport increased by 136,000 in July-September quarter of 2017-18.
The biggest success story of Indian e-commerce started from a two-bedroom apartment in Bengaluru. On Sept. 15, 2007, Sachin Bansal and Binny Bansal (not related) started Flipkart as an online bookstore. The two had known each other since 2005 when they attended the Indian Institute of Technology Delhi (IIT-Delhi) together and were colleagues at Amazon briefly.
Flipkart’s journey has been nothing short of a roller-coaster ride. The company went from record-breaking investments and an acquisition spree to failed business experiments and devaluations—only to bounce back.
Here are the key milestones in the journey of the third-most-funded private company in the world.
|October 2007||Flipkart’s first order goes out to a customer in Mahbubnagar (now in the southern state of Telangana). In the first year, Flipkart makes 20 shipments.|
|September 2009||Raises $1 million in its first funding round from Accel Partners. The company’s total headcount hits 150.|
|~ 2010||Launches the cash on delivery option, which gave a massive boost to online retail in India.|
|December 2010||First acquisition buys book recommendation and review platform weRead.com.|
|October 2011||Acquires Mallers Inc (Mime360), a digital music store company, in a cash and stock deal.|
|November 2011||Acquires Accel Partners-backed Chakpak.com, a Bollywood news site that offers news, photos, and videos.|
|February 2012||Launches Flyte, a digital music store where users can discover and download music.|
|February 2012||Acquires Letsbuy.com, the country’s second-largest online electronics retailer at the time. The deal was reportedly valued at around $25 million.|
|April 2013||Moves to a marketplace model from an inventory-led model, where a company no longer owns the goods sold through its portal. Instead, it turns its portal into a virtual mall, giving consumers access to multiple sellers and brands.|
|May 2013||Shuts its music store Flyte MP3. “We have realized that the music downloads business in India will not reach scale unless several problem areas such as music piracy and easy micro-payments, etc. are solved in great depth… (we will) revisit the digital music market opportunity at a later stage,” the company said at the time.|
|July 2013||Launches PayZippy, an online payments solution for merchants, and reveals plans to launch a customer-facing payments product soon.|
|July 2013||Raises $200 million in the single-largest funding round in the Indian e-commerce space at the time, valuing the company at $1.5 billion. Investors in this round include South African internet company Naspers, Accel Partners, Tiger Global, and Iconiq Capital.|
|September 2013||Launches an Android app.|
|October 2013||Raises $160 million from Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina, Vulcan Capital, and Tiger Global.|
|July 2014||Raises $1 billion from Singapore’s sovereign wealth fund, GIC, and some existing investors, making this the biggest single funding round by an Indian internet company at the time.|
|May 2014||Raises $210 million in a round led by Russian billionaire Yuri Milner’s fund DST Global.|
|May 2014||Acquires online lifestyle retailer Myntra.com for $300 million. Flipkart gets valued at around $2 billion and has a GMV of $1.9 billion. The GMV is the total value of goods sold on an e-commerce portal.|
|September 2014||Acquires majority stake in payments platform Ngpay.|
|October 2014||Launches its flagship annual sale: the Big Billion Day.The “Big” in “Big Billion Day” stands for the audacity and largeness of the event, while “billion” refers to the population of India, the company said.|
|November 2014||Shuts PayZippy due to “a change in strategic direction” and merges it with Ngpay.|
|November 2014||Acquires majority stake in Jeeves Consumer Services, which provides after-sales services for large home appliances and electronics.|
|December 2014||Raises $700 million from existing as well as new investors, including Baillie Gifford, Greenoaks Capital, Steadview Capital, T Rowe Price Associates, and Qatar Investment Authority. The company is valued at around $11 billion.|
|March 2015||Flipkart and Myntra shut their mobile websites in an attempt to become an app-only shopping platform.|
|March 2015||Acquires Sequoia Capital-backed mobile advertising company AdIquity.|
|April 2015||Says will shut its desktop website soon, too, and go app-only.|
|April 2015||Acquires mobile marketing firm AppIterate to support its “mobile-first strategy.”|
|May 2015||Raises $500 million at a valuation of $15.5 billion.|
|June 2015||Introduces a new maternity, paternity, and adoption leave policy that is far better than most Indian companies have until then.|
|July 2015||Raises $700 million in its tenth funding round at a valuation of $15 billion.|
|September 2015||Acquires payment services startup FX Mart for about $6.8 million.|
|November 2015||Takes a u-turn on its mobile-only strategy. Launches a data-light mobile website called “Flipkart Lite.”|
|November 2015||Invests in Qikpod, a then yet-to-be-launched startup that planned to offer locker service for deliveries.|
|January 2016||Binny Bansal takes over as the CEO, replacing Sachin Bansal, who becomes the company’s executive chairman.|
|March 2016||Morgan Stanley trims Flipkart’s valuation by 27%.|
|April 2016||T Rowe Price cuts the value of its holding in Flipkart by 15%.|
|April 2016||Time magazine names Flipkart’s founders among 100 most–influential people in the world.|
|April 2016||Acquires UPI-based payments start-up PhonePe, which was launched in December 2015 by three former Flipkart employees.|
|January 2017||For the first time since its inception, Flipkart appoints a non-founding CEO, Kalyan Krishnamurthy, a former executive with investor Tiger Global.|
|April 2017||Raises $1.4 billion from Chinese internet firm Tencent, American online retailer eBay, and software giant Microsoft. Also acquires eBay in exchange for equity. eBay continues to operate as an independent entity.|
|August 2017||Softbank’s $100 billion Vision Fund invests $1.5 billion in the company to become one of its largest shareholders.|