The big day is here.
Retail giant Walmart is readying a war chest to acquire Flipkart, a
Singapore-headquartered ‘not-for-profit’ ecommerce firm currently controlled by
funds from the United States, Russia, China, Japan and South Africa. And India
is celebrating with high-fives. Here’s why.
Over the past decade,
Flipkart and other e-commerce start-ups raised billions of dollars, offered
unsustainable discounts to acquire customers while brutally elbowing out other
less-funded local competitors to become the undisputed leaders in gross
merchandise value and financial losses. Unfortunately for them, Amazon, the
gold standard in e-commerce, armed with superior technology, stronger brand,
operational excellence and access to huge funds, entered the scene. This
created a problem for the investors who suddenly saw huge potential exits
transforming into irrelevance (Snapdeal, Jabong) and, specifically, Flipkart
moving from industry numero uno to number two in a two-horse race. Or, in other
words, last.
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