Is Walmart's decision to buy Flipkart is good?

US retail giant Walmart Inc., purchased the Indian online-retail startup for $16 Billion. Is this deal really bought something for Walmart to start in India?

Walmart Inc., controlled by the Walton family, led a group that bought a 77 percent stake in Flipkart Online Services Pvt. The deal valued the Indian company at about $21 billion.


Analysis..

Walmart and Amazon, both are fighting for their supremacy in United States and now this fight becomes intercontinental.  After losing in China, Amazon doesn't want to loose in India too, so they offer to purchase flipkart even before Walmart, but Flipkart always denied their offer. 
Walmart on the other hand, is trying to place its hands on e-commerce business to rival Amazon. They got the chance to do this by purchasing Flipkart, a well known competitor to Amazon in india. 

India as a very big market, serves best for Walmart to enter into the business. Walmart put a high risk on purchasing flipkart for $16B, because, this is the highest ever purchase done by Walmart.

This merger is quite big and so, financial looses are predictable. It has been said that for the upcoming year or two, Flipkart is supposed to be in financial loss. Walmart's stocks are also falling down after the purchase and that's normal.

On long run however, this purchase is going to be profitable for both Walmart and flipkart. Walmart already said that this acquisition doesn't affect the working and strategies of Flipkart in anyway, and the company continues to work as a separate entity. This decision taken by Walmart is good considering Flipkart is doing great in India.

For Amazon..?

What's this deal means to Amazon's business in India? Well, the answer is quite simple. Amazon is still second largest e-commerce company in India after Flipkart and this deal make Flipkart even a bigger competitor, as now they have Walmart as their parent. Investing money for deals is now easy for Flipkart. 

Amazon now have to work hard for gain the top position in India, and that's why amazon.com always wanted to purchase flipkart.com so that they can cut the competition in India and reach a price saturation for the products available.

For Flipkart..?

This deal is going to be great turn for Flipkart. Having Walmart as their parent company, now Flipkart can invest in research and development more and can advance their technology.
Also, Flipkart is going to be a tough competition for Amazon now.

Conclusion..

For me, this deal is great. but I love if Amazon had bought Flipkart. Amazon is already established in e-commerce sector and they can be great in shaping India's overall online shopping experience. With Flipkart merged with amazon, we can get many products at a saturated price point without any hassle.

Although these are my thoughts, and I'm no financial advisor. Walmart can now compete with Amazon as they always wanted. 
I will not get excited if I see Flipkart becoming a global e-commerce retailer same as Amazon in near future, or even with Walmart's branding.

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