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Flipkart is India's Amazon.
It's the country's largest online retailer.
In 2018 retail giant Walmart announced its intention to acquire a controlling stake in the company for $16 billion.
Making this the largest e-commerce acquisition ever.
Flipkart was founded here in Bangalore in 2007 by Sachin Bansal and Binny Bansal, two Indian software engineers, that happen to share the same surname.
They both worked for Amazon in the U.S. before returning to India to start their company.
Like Amazon, Flipkart began as an online bookstore.
In its first full year of business, it delivered nearly three and half thousand shipments of books.
Now its website has 10 million page visits a day and sells more than 80 different categories of goods, which includes everything from food processors to yoga mats.
This expansion has been supported by the company's own digital ecosystem.
In 2009 it founded Ekart, its in-house supply chain arm.
Ekart is now India's largest logistics company delivering 10 million shipments a month for Flipkart, as well as independent brands and sellers.
It also owns PhonePe, an app the company acquired in 2016, which helps facilitate electronic payments throughout the country.
In addition, Flipkart's purchase of two of India's leading online fashion retailers:
Myntra and Jabong ensured the company remained the leading player in India's online retail industry.
Flipkart's strong position in the market attracted $1.4 billion of investment in 2017 from Microsoft, eBay, Tencent and SoftBank.
The Indian e-commerce market as a whole is set to quadruple to $200 billion in the next eight years.
And by 2034 it's predicted to surpass the U.S. as the second largest e-commerce market in the world.
The predicted growth in e-commerce has increased competition between the big online retailers.
Amazon has been taking on Flipkart in its own backyard.
Both have been offering massive sales and discounts pegged to Indian festivals as they battle it out for more customers.
While Amazon's size and profitable cloud computing service allows it to absorb these costs, Flipkart has suffered losses in its struggle to compete.
However, the Flipkart Group as a whole still has the largest share of the market and remains the e-commerce leader in India.
Walmart's online sales, however, account for just a little more than three and a half percent of its business in the U.S.
Acquiring Flipkart gives them a considerable foothold in the sector.
Yet when news of the deal broke, the American retailer's shares tumbled four percent.
With investors concerned that the company had a long way to go before becoming profitable.
The acquisition of a loss-making business also cut Walmart's profits at the end of 2018 and its earnings outlook for 2019.
The company also warned that e-commerce growth would be slower next year.
For Flipkart, Walmart's investment is seen by many as a major boost to the company's logistical operations.
It will also help it move into new areas like online groceries.
Water, please.
Along with a strong food supply chain, Walmart's financial support will also help Flipkart keep prices low in its battle with Amazon.
Several key investors have exited the company, including co-founder Sachin Bansal, and they leave with hefty profits.
Venture capital firms Accel and Tiger Global invested when Flipkart was valued at just $50 million.
They have now pocketed more than 400 times what they invested and still retain some shares.
Softbank is also a big beneficiary of the deal.
Its Vision Fund invested $2.5 billion in 2017.
And in just over 12 months the Japanese company sold its 20% stake for $4 billion.
Co-founder Binny Bansal had planned to stay on as the company's chief executive.
But resigned after an internal investigation into serious personal misconduct following an accusation of sexual assault.
He still owns 4.2% of the company and remains a director on the board.
Amid the controversy, Walmart increased its stake in the $20 billion company from 77% to 81.3%.
Offering another sign of its support of an online retail market that is still small by global standards.
The value and sale of Flipkart to a major corporation like Walmart will likely encourage investors to see India's e-commerce market as an area of growth.
Already the Indian startup Ola is competing fiercely with Uber in the taxi aggregation market.
And both have Softbank as a major shareholder.
As the world's major tech companies focus more of their attention on India, Flipkart may be the first of many start-up success stories emerging from the growing e-commerce space.
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What is Flipkart? | CNBC Explains

6593 Folder Collection
Celeste published on June 2, 2019    Celeste translated    Evangeline reviewed
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