A 20% stake would take Walmart ahead of Flipkart’s largest existing investors, SoftBank and Tiger Global Management.

(Bloomberg) —Is India’s e-commerce leader Flipkart Online Services Pvt worth $20 billion?

Walmart Inc. is weighing just that in negotiations to become Flipkart’s largest shareholder, according to people familiar with the matter, as the startup fends off Amazon.com Inc. in what’s essentially a three-player market. China’s Alibaba Group Holding Ltd. has backed new entrant Paytm E-commerce Pvt.

The world’s biggest retailer is discussing a proposal that would give it as much as a fifth of Flipkart for a valuation as high as $20 billion, the people said, asking not to be identified discussing a private matter. Walmart kicked off the latest round of talks by offering to value the company at about $15 billion, though Flipkart is holding out for more, the people said. Discussions are at an advanced stage, though the terms could change and the deal may not be finalized, they said.

A 20% stake would take Walmart ahead of Flipkart’s largest existing investors, SoftBank and Tiger Global Management. It would also open a new front for the bricks-and-mortar retail giant to take on Amazon, with the two increasingly encroaching on each other’s turf. Amazon is ranked No. 1 in the Internet Retailer 2017 Top 500, with Walmart at No. 3.


Walmart teamed up with Tokyo-based e-commerce player Rakuten Inc. last month, a year after it purchased online retailer Jet.com Inc., while Amazon acquired Whole Foods Market Inc. and its chain of stores last summer.

India is the next big potential prize after the United States and China, where foreign retailers have made little progress against Alibaba.

“Walmart doesn’t have much of a choice in India,” said Arvind Singhal, chairman of the New Delhi-based retail consultancy Technopak Advisors Pvt. “They either have to go it alone or partner with someone else as Indian e-commerce has the potential to become really big.”

Flipkart was valued at about $12 billion last year, according to researcher CB Insights. Walmart and Flipkart did not respond to requests for comment. The Times of India earlier reported on the possible valuation jump.


The e-commerce battle in India has intensified in the past year as global competitors zeroed in on the country’s potential—and market leader Flipkart. The online market in Asia’s third-largest economy may reach $28 billion by 2020, Kotak Institutional Equities estimates.

Amazon founder Jeff Bezos has vowed to spend $5 billion to gain ground in the country while China’s Alibaba has backed Paytm.

“Walmart will make Flipkart a stronger rival to Amazon,” said Singhal. “Strategically, combining forces makes sense for both.”

An alliance with Walmart would give Flipkart additional capital and retail muscle to fight back against the rising competition. Japan’s SoftBank Group Corp. invested $2.5 billion in Flipkart, including the purchase of shares from some early investors.


Walmart has few choices to expand in the market beyond Flipkart, with Amazon on one side and Alibaba on the other. Snapdeal.com, a once thriving e-commerce provider, has lost ground and support from early backer SoftBank. The Japanese company, which held almost a third of Snapdeal shares, had pushed a merger with Flipkart to create a stronger competitor to Amazon. That deal fell apart after Snapdeal’s founders raised objections.