Both, Alphabet Inc. (GOOGL) and Walmart Inc. (WMT) are all set to join hands against their rivals, Amazon.com Inc. (AMZN). The CNBC also reported about Amazon being one of the fastest growing online retail markets.
Walmart declared on Tuesday that it will be investing $16 billion to get hold over 77% of the stake of India’s largest e-commerce market, Flipkart. There were chances of other potential investors too who would spend on buying the stakes in a deal.
Continue reading more about the Flipkart Walmart Deal
According to sources, one of the potential investors could be the Google Parent Company, Alphabet. An Indian media informed about the interest of Alphabet on Flipkart even before the announcement of Walmart for taking the stakes of Flipkart.
CNBC described that the conversations among Walmart, Amazon and Flipkart were continuing for some time. There was some news too regarding the California based firm, Mountainview. The reports suggested that this firm were not much likely to pay the amount that the press had reported. The Hindu Business recently said that Alphabet maybe spending an amount of $3 billion to buy 10% stakes of Flipkart.
A former employee of Flipkart and Google, unaware of the matter said that the interest of Alphabet over Flipkart is valid enough. Punit Soni said, “There is a strong benefit in people buying a lot of Android phones and e-commerce in India is a huge conduit for that, So there’s a little bit of a ‘next billion users’ strategy and a bit of making Amazon sweat.”
Interest of Alphabet on Amazon
According to an unknown source, known as executive of Flipkart, Alphabet could well use this opportunity to promote the benefits of its enterprise technology. Buying stakes of an Indian company could make it able to give a strong competition to its potential rivals, Amazon.com Inc (AMZN). Amazon is recently ruling the online market and is the exclusive provider for Flipkart and Microsoft.
Another source informed The Hindu that the investment of Alphabet on Flipkart would give Alphabet a well understanding of the consumers of India. This could eventually act beneficial for their “data strategy”.
The partnership of Alphabet and Walmart
The partnership of Alphabet and Walmart is already prevalent in US. The retailers sell their products on the platform of Google Express, using modes such as Google Assistant. This is made easier by Google Home, the voice controlled speaker that is a rival to Echo by Amazon.
If they pair up in India too, they would be giving a tough competition to their potential rival, Amazon. Walmart took over Amazon by outbidding the major stakes of Flipkart. This will be a better opportunity in the share market.
Hemchandra Javeri, the co-founder of Forum Synergies India PE Fund Managers in an interview told The Hindu, “If I am Amazon and if I have to defend my second biggest market which is India (against Walmart) then I have to buy Flipkart, it makes absolute sense. There is so much headroom for the online retail to grow in India that the valuation of Flipkart would appear small after some time.”