Walmart acquired 77 per cent of Flipkart for $16 billion in May.
Moneycontrol News
Flipkart opted to go along with Walmart instead of Amazon as the former had the potential for the company to remain a 'local business', said Binny Bansal, Chief Executive Officer of Flipkart.
"From a Walmart participation perspective, it worked out well for both the parties. Obviously, Walmart was looking to make a big play in India. In the next 10 years, India is going to be one of the biggest growth markets in the world. From a Flipkart perspective also, it was very critical that we remain a local business. The management remains the same because that is what really creates the passion and the value. Those two things were very critical in the final decision," he said at the Young Turks Conclave.
Walmart acquired 77 per cent of Flipkart for $16 billion in May.
The remainder of the business stays with some of Flipkart’s existing shareholders, including Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp.
Amazon was also in the race to acquire Flipkart. Walmart's foray into India's online retail space has set the stage for an American business war against Amazon in the world’s fifth largest economy. According to Bansal, the valuation offered by both the companies were good and that was not the prime factor for the deal.
Bansal also said that the company will continue to focus on fashion as a core category. Flipkart Group has three fashion verticals. While Flipkart has its own fashion segment, It also owns Myntra and Jabong.
"We have the most (market) share there and five-ten years from now, that is still going to be one of the biggest categories both from the topline and bottom-line perspective," he said, adding that mobile phones and electronics will remain the core businesses from a category perspective.
