Walmart to compete with Amazon with $16bn for 77 per cent stake in Flipkart as “Kart goes to Mart”

The Arkansas-based Walmart is pounce on Flipkart, India’s biggest online retailer, setting up a global fight with Amazon for the fastest growing Indian e-commerce sector in a deal worth $16bn to take a 77 per cent stake.

Doug McMillon, Walmart’s CEO will fly to India this week to announce the largest e-commerce deal. The acquisition comes as Walmart overhauls its international strategy having ceded control of Asda to Sainsbury last week.

Flipkart founded by Sachin and Binny Bansal, two former Amazon workers, grew rapidly by offering books before expanding into electronics and other goods.

Despite Amazon committing $5bn of capital in India in 2013 for e-commerce, Flipkart, held its lead in volumes with help of strong financial backing from its biggest investor New York-based Tiger Global Management, which was joined by US groups eBay and Microsoft and Tencent of China. Japan’s Softbank, which invested $2.5bn in Flipkart last August will sell its holding, while Tiger Global will retain a 5 per cent stake and the Bansals a 10 per cent.

According to an independent research which predicted online sales in India, would grow at 26 per cent annually over the next five years.