The US based retail store chain Walmart is in talks with desi ecommerce bellwether Flipkart to work out an association. Walmart is considering buying a minority stake in the ecommerce company. The move will speed up Walmart’s entry into India. Both companies declined to comment on ‘rumours and speculations’.
The second attempt to enter India
Walmart had earlier tied up with the Bharti group, but in 2014, the deal broke off. The two had come together in 2007 to conduct wholesale activities. Walmart decided to step away after suffering losses to the tune of $151 million. There were issues related to FDI and a possible violation of the US Foreign Corrupt Practices Act. The latter prohibits American companies from bribing foreign government bodies.
The FDI blessing
Thanks to the updated Foreign Direct Investment (FDI) law, foreign companies can invest 100% in Indian enterprises. This is exactly what Walmart is trying to do by obtaining a stake in Flipkart.
Walmart – Flipkart versus Amazon
Walmart and Amazon have an old rivalry that originated in their home ground and will now be played out on Indian soil. The former is trying to leverage the existing feud between Flipkart and Amazon. However, Amazon doesn’t seem to be perturbed by the goings on. The company has a good financial backing, plus its sales figures are well ahead of the others’.
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