India's ecommerce market, which is estimated to be worth $200 billion over the next decade, has been hotly pursued in recent years by both Amazon and Walmart, without great success; thus, the intense interest in leading player Flipkart.
It seems that it is just a matter of time as Walmart is poised to buy more than 51 per cent stake in Flipkart, pushing Amazon probably out of the race.
Reports say Walmart was ready to pay up to $12 billion to acquire more than a 55 per cent stake in the e-tailer and has been in talks with Flipkart founders Sachin and Binny Bansal. Any Flipkart-Amazon deal is likely to come under the scanner of the Competition Commission of India (CCI), given the dominant market share these two entities have grabbed in the e-commerce space - around 70 per cent collectively.
- Amazon told Reuters it does not comment on rumours and speculation. The company did not immediately respond to AFP's request for comment.
For Amazon, throwing its hat in the ring could be as much about derailing Walmart's efforts as it would be about defending its 27 percent market share in India, consultants and investors said.
However, SoftBank maintains, Flipkart and Amazon combined will only manage a mere 1.5% stake in the broader Indian retailing industry and therefore is unlikely to run into regulatory hurdles.
It also marks a shift in Walmart's traditional approach of building a business on its own.
The source said on condition of anonymity that a deal could take at least a month to be signed.
Walmart has been expanding its online offerings and is looking to gain a presence in India.
US-based fund house Valic, which holds around 4,502 shares in Flipkart, and Vanguard World Fund, which has four lakh shares, have pegged the valuation of the e-commerce company between $15 billion and $19 billion.
Ecommerce major Amazon has offered to buy 60% stake in Flipkart.
Amazon.com, Inc. shares were unchanged in premarket trading Thursday.
In an interview with Reuters on Tuesday, McKenna said India was a "growth market", and downplayed analyst criticism that the company has been slow to move in the country.
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