After committing $5 billion to investments in India, Amazon reportedly wants to increase its investment by $2 billion. With the additional capital, the eCommerce retailer could better compete with Walmart in India, CNBC reported.
“Amazon has had its eyes and ears firmly on the ground and has been carefully planning its strategy,” an unnamed source told CNBC affiliate CNBC TV-18. “India is one of its fastest-growing geographies, and Amazon will not be left behind.”
Citi Research projected Amazon’s market in India could be worth $16 billion. And with Walmart’s acquisition of Flipkart, “Flipkart’s ability to increase market share and India presence will increase,” the source told CNBC TV-18.
The news comes as Amazon reportedly made a formal offer to acquire a majority stake in Flipkart as a counter to Walmart’s interest in the Indian eCommerce retailer. According to sources, Amazon wanted to buy 60 percent of Flipkart, CNBC reported. Amazon’s offer was said to have likely matched Walmart’s. According to reports earlier last year, Walmart was considering investing $10 billion to $12 billion for such a deal. Even so, Amazon reportedly offered Flipkart a breakup fee of $2 billion. The company also reportedly sought a non-compete agreement from Flipkart’s founders.
But the race to win Flipkart is over — won by Walmart with a $15 billion bid on the firm. The deal gave Walmart a majority stake in the firm, roughly 75 percent of the entire Flipkart group. The final outcome came as a surprise to many, such as Kashyap Deorah, internet entrepreneur and author of “The Golden Tap.
“I would not have bet on a deal converging between Walmart and Flipkart, primarily because of the culture difference,” Deorah told The Wall Street Journal. “Walmart is an extensively positive margin-driven culture, and Flipkart has consistently been a gross margin negative business.”