Wal-Mart is in Talks to Invest in Flipkart read more at here www.spinonews.com/index.php/item/1062-wal-mart-is-in-talks-to-invest-in-flipkart

Wal-Mart Stores Inc is in talks to buy a minority stake in India's largest e-commerce firm Flipkart. Walmart is redy to invest around $1 billion into Flipkart Online Services.

Flipkart is the largest online retailer in India. Final terms of the deal haven’t been worked out and negotiations are still underway. Flipkart’s most recent valuation was $16 billion, according to research firm CB Insights.

“If the deal goes through, the competitive intensity between Flipkart and Amazon will shoot up,” said Gautam Chhaochharia, the Mumbai-based head of India research at UBS.

The deal has potential benefits for Wal-Mart too. Beyond any eventual financial return on its investment, Wal-Mart would gain exposure to India’s expanding e-commerce market and have the opportunity to challenge Amazon on more equal footing than the U.S.

Wal-Mart’s e-commerce sales last year reached nearly $14 billion, or 3% of its total revenue of $482 billion, but quarterly e-commerce growth has slowed in recent years. Amazon’s revenue was $107 billion last year, including its web-services business, its growth outpacing that of Wal-Mart.

Alibaba has been funding Snapdeal.com, the third-largest competitor in Indian e-commerce.if Amazon and Wal-Mart both keep stepping up their investments, Alibaba may have to consider doing the same, either with Snapdeal or on its own.

Flipkart held discussions with Chinese e-commerce company JD.com Inc. for a possible investment a few months ago, but that didn’t result in a deal, a person familiar with the matter said. Last week Flipkart crossed the 100-million registered users mark, becoming the first e-commerce company in the country to hit the milestone.

 

Wal-Mart in India and Flipkart declined to be identified because the talks are preliminary and have not been made public.