Flipkart deal good for India, says Walmart CEO Doug McMillon

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Walmart's digitally powered e-channel will vitiate the retail and e-commerce market, resulting in an uneven level playing field, said CAIT in a statement.

The remainder of the Flipkart stake will be held by some of Flipkart's existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.

Naspers said the proceeds will be used to reinforce its balance sheet and will be invested over time to accelerate the growth of its classifieds, online food delivery and fintech businesses globally. He also said that until the authority is constituted, the government should scrutinise the deal.

Notably, when Flipkart acquired eBay's India business previous year, Flipkart had launched a global programme that aimed to give the sellers on its platform an opportunity to sell their products globally - as many as 200 countries - in collaboration with eBay. Naspers initially invested in Flipkart in August 2012 and its cumulative investment to the point of sale amounts to $616 million.

Walmart will pay approximately $16 billion for an initial stake of approximately 77 per cent in Flipkart, subject to regulatory approval in India.

The acquisition opens a new front in its battle with Amazon, which had expressed interest in making a competing offer.

It's said that both companies will operate distinctively in the country.

Last but not the least, a little more than 100 employees in Flipkart are also slated to become dollar millionaires. As far as Flipkart performance goes, it posted a loss of Rs 8,771 crore for fiscal ending March, 2017 and has logged sales of around $4.6 billion in the fiscal ended March, 2018.

While the online auction and shopping website has had tremendous success in the USA, it has struggled to make a similar impact in India despite launching in 2005, two years before the launch of Flipkart and five years ahead of Amazon launch in the country.

Walmart expects the deal to help set it up "for growth and profits in the future", CEO Doug McMillon said during a call with investors.

Walmart entered the Indian market in 2007 through a joint venture with a local company, years before Amazon debuted there. "While eCommerce is still a relatively small part of retail in India, we see great potential to grow". "Plans are on track", Walmart India President and CEO Krish Iyer said at a select media roundtable. Reuters has reported Google-parent Alphabet may buy a roughly 15% stake in Flipkart for $3 billion.

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