What Walmart-Flipkart deal could mean for e-commerce in India

THE world witnessed its biggest e-commerce deal when the American retail giant, Walmart, announced the acquisition of a 77 per cent stake in Flipkart, India's major online retail platform. The acquisition, at a value of US$16 billion, is reportedly the largest buyout by Walmart in online retail space. Apart from the large financial size of the acquisition, the deal fundamentally changes the competitive character of India's e-commerce market.

Both Walmart and Amazon had been eyeing Flipkart to consolidate their positions in the Indian e-commerce market. Their interest in it points to the prospects of strong returns from Indian online retail business and the niche that Flipkart has been able to develop in the industry within a decade of commencing operations.

Starting modestly in 2008 by selling books online, Flipkart grew rapidly, diversifying across a wide range of products, and reaching out to consumers from various income groups with different tastes and preferences, and across diverse geographies. Its growth was powered by innovative marketing services such as "Cash on Delivery".