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Walmart deal will make Flipkart's employees millionaires

Walmart deal will make Flipkart's employees millionaires

The Forrester analyst explained: "To remain the number-one player in India - Amazon coming a close second in just four years in India - [Flipkart is] looking to expand beyond smartphones and fashion".

Moreover, from Amazon's perspective, its domination as the global online retailer has forced its biggest American rival, Walmart, to fork out $16 billion for what is easily one of the most expensive acquisitions ever-a clear acknowledgement that Walmart is trying hard to make up for lost time by not investing more aggressively on e-commerce earlier. CEO Bob van Dijk says the group chose to sell because with Walmart running the show it will have little influence in future "and we're not a financial investor".

Walmart's deal to buy a controlling stake in India's biggest online seller is meeting skepticism on Wall Street. However, Walmart will try to keep Amazon off Flipkart by partnering with Google's parent company Alphabet.

Reacting to the deal, RSS affiliate Swadeshi Jagran Manch has alleged that Walmart was "circumventing" rules for a "back-door entry" into India, and sought Prime Minister Narendra Modis intervention to safeguard "national interest".

Flipkart truly upheld audacity and customer centricity and I got to work with the best people. The Bansals, likewise, would be wiser, getting some knowledge about how to sell groceries online, something rival Amazon is betting big on.

Binny Bansal, who co-founded Flipkart with Sachin Bansal 11 years ago, will retain his 5.5 per cent stake and will be chairman of the company's board.

He said SoftBank's $2.5 billion stake in the company would be worth $4 billion with the acquisition.

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Flipkart co-founders Sachin Bansal (R) and Binny Bansal in Bengaluru. The companies said they're also in talks with other potential investors, which could result in the US company's stake being lowered, though it will retain majority ownership.

SoftBank, Flipkart's largest investor before the deal, will also completely exit the company.

A February regulatory filing with US Securities and Exchange Commission (SEC) stated that eBay Inc made a gain of $167 million by selling the eBay India business to Flipkart. This will make Walmart be a part of local deals across India. The deal will see Walmart increase its foothold in Indian eCommerce, a market which is expected to surge in the next decade. So far it had been handicapped by Indias retail policy that does not allow overseas companies to sell directly to consumers (except in wholesale cash-and-carry segment).

Walmart, whose profits have already been pinched by efforts to build up its e-commerce in the United States, notably grocery delivery and pickup, has already tested investor patience for the past few years with its tech investments.

Walmart plans to link consumers through its partnership with kirana stores.

United States e-tail giant Amazon has infused fresh capital to the tune of Rs 2,600 crore into its India unit, Amazon Seller Services, to strengthen the war-chest of the company against domestic rival Flipkart.

The U.S. company said its investment would include USD$2bn (£1.48bn) in new equity funding, which Flipkart could tap to accelerate its growth in the future.

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