The biggest acquisition deal between Indian e-commerce giant Flipkart and US based- Walmart was finalised yesterday for a 77 percent stake worth $16 billion. While the deal may have benefitted its co-founder and some employee stake-holders, it is set to benefit the Indian economy; accelerating job creation while also promoting farmers’ income and ‘Make In India’ initiative.
The investment will help accelerate Flipkart's mission to transform commerce in India through technology and underscores Walmart’s commitment to sustained job creation and investment in India.
Doug McMillon, Walmart’s president and CEO said, “Our investment will benefit India providing quality, affordable goods for customers, while creating new skilled jobs and fresh opportunities for small suppliers, farmers and women entrepreneurs.”
While Walmart and Flipkart will leverage the combined strengths of both companies, they will maintain distinct brands and operating structures. Currently, Walmart India operates 21 Best Price cash-and-carry stores and one fulfillment center in 19 cities across nine states in India, with more than 95 percent of sourcing coming from India, aiding suppliers, creating skilled jobs and contributing to local economies across the country.
The number of jobs to be created is however unclear, but the deal between the companies would create jobs through development of supply chains, commercial opportunity and direct employment.
Walmart, in collaboration with Flipkart will support small businesses and ‘Make In India’ through direct procurement as well as increased opportunities for exports through global sourcing and e-commerce. Among other initiatives, Walmart will partner with kirana owners and members to help modernize their retail practices and adopt digital payment technologies.
Supporting the farmers, the company will develop supply chains through local sourcing and improved market access and help reduce food waste by improving waste management practices and investing in supply chains, especially cold storage.