Walmart Flipkart $16 bn Deal: All your important questions answered here

How big is the deal, who will benefit, who has opposed it, and what comes next? Business Standard answers key questions on the Walmart-Flipkart deal.

Companies News India : US retailer Walmart Inc said on Wednesday it will pay $16 billion for roughly 77 per cent stake in e-commerce firm Flipkart, as it competes with Amazon Inc in India, which is an important growth market.

With the deal done, Flipkart co-founder Sachin Bansal will be exiting the Bengaluru-based company. According to his Facebook post addressing Flipkart employees, Bansal plans to catch up on gaming and brush up his coding skills.

Here are some key things to know about the deal:

• How big is the deal in dollar terms?
  Walmart will pay $16 billion for a roughly 77 per cent stake in Flipkart. According to Reuters, Walmart has said that it plans to fund the Flipkart deal through a combination of newly-issued debt and cash on hand. The investment will also include $2 billion of new equity funding.
  This is the US retailer’s biggest deal ever.

Why is Walmart buying a majority stake in Flipkart?

• From Walmart Inc, $16 billion is a small price to pay as it aims to compete with global e-commerce giant Amazon, Karan Choudhury writes for Business Standard.
  With this deal, Walmart hopes to finally prop up a formidable opponent against the Jeff Bezos-run juggernaut. According to the report, Walmart hopes that Flipkart will help it understand the e-commerce business better and take on Amazon, not only in India but globally as well.

What does Flipkart get out of the Walmart deal?

• Flipkart co-founder Binny Bansal said Walmart is the ideal partner for the next phase of Flipkart journey as he saw e-commerce having great potential to grow from its current status of being a relatively small part of retail in India.
  Walmart will also expand Flipkart’s online marketplace capabilities by bringing in a host of new products and private labels.

What happens to the Flipkart brand now?

• Walmart and Flipkart will remain separate brands, according to agency reports. Further, the Indian e-commerce company will have an independent board. However, the board will be revamped to give representation to the US firm.

Who will head Flipkart after the Walmart deal?

• Walmart’s Krish Iyer will be the CEO of the company, according to agency reports. The company will continue to be based out of Bengaluru.

What about Flipkart’s founders, are they staying onboard?

• Binny Bansal, who co-founded Flipkart with Sachin Bansal 11 years ago, will retain his 5.5 per cent stake in the company and will be chairman of the company’s board, according to news agencies.
• Sachin is exiting the Bengaluru-based company post the Walmart deal. According to his Facebook post, he plans to catch up on gaming and brush up his coding skills as he takes time off to finish few pending personal projects.

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Story of Flipkart: From modest start to Walmart nuptial and everything in between

Flipkart has given India its big startup success story — the one which is likely to be quoted by starry-eyed entrepreneurs for years to come.

Companies News : From selling books online to striking a jaw-dropping USD 16 billion deal with the world’s largest retailer Walmart, all within 11 years, Flipkart has given India its big startup success story — the one which is likely to be quoted by starry-eyed entrepreneurs for years to come. Former employees of US e-commerce giant Amazon, Sachin Bansal and Binny Bansal had met in 2005 at IIT-Delhi. Flipkart was launched in October 2007.

The idea was simple. Consumers could shop online and get books delivered to their doorstep. Flipkart registered 20 shipments in the year of its debut. It wasn’t an easy road as Internet penetration was abysmally low and e-commerce, unheard of. Bricks and mortar retailers were not threatened and many dismissed e-tailing as a foreign concept saying that Indians want to touch and feel’ whatever they buy.

Today, Indian e-commerce industry is already close to USD 30 billion in size and analysts expect this to zoom to USD 200 billion by 2026. The growth of the sector was comfortably in sync with the meteoric rise of Flipkart.

From a modest two-bedroom apartment in Koramangala, the Bengaluru-headquartered company now has multiple offices across the country. A bulk of its operations are run out of a plush campus in the city that is spread over 1 lakh sq ft and houses 6,800 employees.

It was almost two years after starting the business that Flipkart got its first full-time employee in Ambur Iyyappa, who went on to become a millionaire, thanks to the ESOPs. The headcount was rapidly scaled to 150 that year.

In October the same year, Accel Partners came on board as an investor and pumped in USD 1 million. A few months later, US hedge fund Tiger Global bought into the vision and Flipkart received a funding of USD 10 million.

A number of funding rounds later, Flipkart raised USD 1.4 billion from Tencent, eBay and Microsoft, followed by USD 2.5 billion investment by SoftBank Vision Fund last year. The year 2010 was an important one for Flipkart with the company shipping among other things, electronics and mobile phones. This category now makes up for a significant portion of the sales for the online platform.

It was also the year when Flipkart pioneered ‘Cash on Delivery’ in India, which changed the course of online retail in the country as consumers now paid for items only after receiving them, adding a layer of comfort to online shopping. Flipkart launched its logistics unit, eKart to smoothen deliveries.

In 2016, Flipkart achieved the milestone of 100 million registered customers and saw Sachin and Binny earning a spot among TIME magazine’s list of 100 most influential people. The company made its first acquisition with WeRead and since then, it has acquired a number of companies including Letsbuy, FX Mart, fashion e-tail player Myntra and UPI-based payments startup PhonePe. It also bought a majority stake in companies like Jeeves and ngpay.

At the beginning of last year, Kalyan Krishnamurthy was named as the new CEO, moving Binny Bansal to the role of Group CEO. Reports suggested that Tiger Global wanted better control of the organisation and hence, the decision. Bansals’ e-commerce bet finally has paid off big time and set the 2018 M&A counters ringing with US retailer Walmart buying about 77 per cent stake in Flipkart for USD 16 billion.

→ Flipkart Walmart Deal , Walmart Flipkart Deal ←

Paytm crosses 200 million wallet user base

Since demonetisation the company claims to have made rapid strides in the online wallet sector

 

Latest News - Mobile wallet major, Paytm announced today that its user base has crossed 200 million users. The company said that within three years of launching the Paytm Wallet, it has become most widely used and accepted payment method in the country.

Since demonetisation the company claims to have made rapid strides in the online wallet sector by laying stake to the top position. In the last 12 months, the company has managed to launch a variety of offline services, which have increased the usage of phones at various points.

Paytm wallet has moved from just mobile phone and DTH recharges, electricity, gas and water bill payments, to using it at milk booths, grocery stores, pharmacies and parking among other places.

"Reaching 200 Mn registered users and more than half a million users on a daily basis is a great showcase of the country's trust in our payment solution and reaffirms our belief in the need for a quick and easy cashless payment method. Going forward, we would continue to drive strong consumer-focused innovation in the category to reach the widest set of merchants and consumers in India," said Deepak Abbot, senior vice-president.(read more...)

Paytm launches online marketplace app - Paytm Mall

Paytm Mall aims to offer a combination of the Mall and Bazaar concepts to Indian consumers

 

 

Breaking News : Paytm E-commerce on Monday announced the launch of its new Paytm Mall application on Android.

Paytm Mall aims to offer a combination of the Mall and Bazaar concepts to Indian consumers.

"Only trusted sellers passing strict quality guidelines and qualification criteria will be allowed on the 'Mall'," Paytm said in a statement here.

All products listed on the mall will also go through Paytm certified warehouse and shipping channels ensuring guaranteed consumer trust, it said.

"We have defined quality criteria for sellers and are building strict controls over warehousing and shipping for products sold on Paytm Mall. Consumers would continue to get the largest assortment of domestic and international products through Paytm Bazaar, which will also be featured on the new app," said Saurabh Vashishtha, Vice President - Paytm.

The Bazaar is an unstructured shopping channel on Paytm that will also be featured on a new application, it added.

Paytm Mall has over 17 fulfilment centres across the country to offer consumers an efficient online shopping experience.

The platform would also offer sellers the widest reach through its vast network of over 40 courier partners, it said.

The Paytm Mall would also launch an ungraded version of the Paytm Seller app, available in 7 regional languages allowing anyone with a smartphone to set up an online shop on Paytm Mall.

Paytm Mall is available on Android, and lists over 68 million products sold by 1.4 lakh sellers spread over 1000 cities and towns across the country. The iOS app is expected soon. (read more...)

Step-by-step guide: How to sell your old/new goods on Amazon

Amazon India has started a programme that allows people to sell their old products

Today Latest News - Are you tired of stacking old gadgets, books, magazines, et al? E-commerce giant Amazon India has started a pilot programme in Bangalore that allows people to sell their old products. 

 

In an attempt to mobilise its user base and to encourage peer-to-peer (P2P) sales, Amazon has launched a programme called 'pick-pack-and-pay. 

 

 

So how does Amazon India's pick-pack-and-pay programme work?

Step 1 - List your product/products. Select what you want to sell on Amazon. (Post your new or used products online across different categories – mobiles, books, fashion jewellery, tablets, watches, laptops and video games). Upload your photo. Select the essentials of your product (For example:- brand name, model, publishers). Mention the item condition (new/used). Mention your price, address and other details

Step 2 - Post your ad

Step 3 - Buyers order your product online

Step 4 - You schedule a doorstep pick-up

Step 5 - Amazon picks, packs and ships for you

Step 6 - You receive your money in 3-5 days

Amazon has not yet specified how quickly orders will be processed, but mentioned that buyers will have the option to return products within seven days if defective or not as described.

 

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Walmart-Flipkart tie-up: Why the association is more likely than a stake sale

The world’s largest retailer, Walmart, which is in direct competition with Jeff Bezos-led e-commerce giant Amazon in the US, may be looking at India, the fastest-growing market, for the next round of business rivalry.

A news report on Tuesday said Walmart was in early talks to pick up a minority stake in Flipkart, which claims to be bigger than Amazon in India.

While neither Bentonville-headquartered Walmart nor Sachin Bansal and Binny Bansal-founded Flipkart commented on the issue, a source said it may not make much sense for the American brick-and-mortar giant, with significant online ambition, to pick a minority stake in Flipkart at the valuation it commands

The Bengaluru-based company had past estimated its own value at over $15 billion last year, but many of its investors have marked down the worth since then. Even after the markdowns, which are theoretical, Flipkart is valued at $10-$11 billion.

“A minority stake in Flipkart will not give Walmart any substantial play in the online space, while paying a big price for it,” the source said, explaining why such a  Read Full Story

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ABOUT THE TWO

• It may not make much sense for the American brick-and-mortar giant, with significant online ambition, to pick a minority stake in Flipkart at the valuation it commands, a source said
   
• The talks between the two could be for other strategic tie-ups, rather than a stake deal, another source said
   
• Many analysts have pointed out that there’s a reason for Walmart to gain traction in the online market in India
   
• Walmart has been in negotiations with several e-com firms, including Shopclues and Snapdeal, for presence across online platforms
   
• The biggest trigger is Alibaba finalising its direct India foray

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