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Will Walmart's New Flipkart Deal Enhance its India Business?
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Walmart Inc. (WMT - Free Report) has always been focused on making growth-oriented moves. The company unveiled yet another development related to its international business — the takeover of Wal-Mart India Private Limited by The Flipkart Group. Flipkart’s buyout of Walmart’s India business comes as part of the former’s plans to launch a digital marketplace, Flipkart Wholesale, in August 2020.
Notably, Walmart had invested $16 billion and bought a major stake in Flipkart in 2018, to expand in the growing market of India and firm its footing against Amazon (AMZN - Free Report) . The addition of Flipkart has bolstered Walmart’s e-commerce business in the International segment.
Well, Walmart has been operating in India under the Best Price cash-and-carry business for more than 12 years now and currently caters to more than 1.5 million members, which include hospitality, kiranas, catering ventures and other micro, small and medium-sized enterprises or MSMEs. We believe that Flipkart’s acquisition of a 100% stake in Walmart’s India business is likely to enhance Walmart’s presence in India and help it compete better with Amazon.
Flipkart’s buyout of Walmart’s India business will enable the former to better serve kiranas and MSMEs, who are integral to the retail space of the nation. This is because Flipkart can leverage Walmart’s expertise in the wholesale space, thanks to its experience with the cash-and-carry business. As noted earlier, this move comes as part of Flipkart’s plan to launch Flipkart Wholesale marketplace, which is focused on using technology and offering kiranas and MSMEs a broad range of products at a reasonable value.
Flipkart Wholesale appears to be a strategically appropriate decision, as it will have the best of Flipkart’s technological capacity and footing in the India e-commerce space, together with Walmart India’s merchandising experience. These factors, along with easy credit options via Flipkart initiative, are likely to work well for kiranas and MSMEs, especially at a time when consumers across most countries have been piling up stocks amid the pandemic. Thus, these moves are likely to strengthen operations of Flipkart, which in turn will benefit its majority owner, Walmart.
Wrapping Up
Walmart has long been gaining on its robust e-commerce initiatives, including buyouts, alliances, and improved delivery and payment systems. In fact, the pandemic-led higher stay-at-home trends boosted e-commerce sales all the more in first-quarter fiscal 2021, wherein both top and bottom lines improved year over year and beat the Zacks Consensus Estimate. Results gained from increased demand owing to the coronavirus-led stock hoarding. U.S. e-commerce sales surged 74% in the quarter on strength in grocery pickup and delivery, walmart.com and the marketplace. The company saw an increased shift to online shopping, given the increase in stay-at-home trends.
Shares of this Zacks Rank #3 (Hold) company have rallied 13.6% in the past six months compared with the industry’s growth of 14.8%.
Big Lots (BIG - Free Report) has a Zacks Rank #1 and a long-term earnings growth rate of 7.1%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
Image: Bigstock
Will Walmart's New Flipkart Deal Enhance its India Business?
Walmart Inc. (WMT - Free Report) has always been focused on making growth-oriented moves. The company unveiled yet another development related to its international business — the takeover of Wal-Mart India Private Limited by The Flipkart Group. Flipkart’s buyout of Walmart’s India business comes as part of the former’s plans to launch a digital marketplace, Flipkart Wholesale, in August 2020.
Notably, Walmart had invested $16 billion and bought a major stake in Flipkart in 2018, to expand in the growing market of India and firm its footing against Amazon (AMZN - Free Report) . The addition of Flipkart has bolstered Walmart’s e-commerce business in the International segment.
Well, Walmart has been operating in India under the Best Price cash-and-carry business for more than 12 years now and currently caters to more than 1.5 million members, which include hospitality, kiranas, catering ventures and other micro, small and medium-sized enterprises or MSMEs. We believe that Flipkart’s acquisition of a 100% stake in Walmart’s India business is likely to enhance Walmart’s presence in India and help it compete better with Amazon.
Flipkart’s buyout of Walmart’s India business will enable the former to better serve kiranas and MSMEs, who are integral to the retail space of the nation. This is because Flipkart can leverage Walmart’s expertise in the wholesale space, thanks to its experience with the cash-and-carry business. As noted earlier, this move comes as part of Flipkart’s plan to launch Flipkart Wholesale marketplace, which is focused on using technology and offering kiranas and MSMEs a broad range of products at a reasonable value.
Flipkart Wholesale appears to be a strategically appropriate decision, as it will have the best of Flipkart’s technological capacity and footing in the India e-commerce space, together with Walmart India’s merchandising experience. These factors, along with easy credit options via Flipkart initiative, are likely to work well for kiranas and MSMEs, especially at a time when consumers across most countries have been piling up stocks amid the pandemic. Thus, these moves are likely to strengthen operations of Flipkart, which in turn will benefit its majority owner, Walmart.
Wrapping Up
Walmart has long been gaining on its robust e-commerce initiatives, including buyouts, alliances, and improved delivery and payment systems. In fact, the pandemic-led higher stay-at-home trends boosted e-commerce sales all the more in first-quarter fiscal 2021, wherein both top and bottom lines improved year over year and beat the Zacks Consensus Estimate. Results gained from increased demand owing to the coronavirus-led stock hoarding. U.S. e-commerce sales surged 74% in the quarter on strength in grocery pickup and delivery, walmart.com and the marketplace. The company saw an increased shift to online shopping, given the increase in stay-at-home trends.
Shares of this Zacks Rank #3 (Hold) company have rallied 13.6% in the past six months compared with the industry’s growth of 14.8%.
Retail Stocks to Bet On
Kroger (KR - Free Report) has a Zacks Rank #1 (Strong Buy) and a long-term earnings growth rate of 5.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Big Lots (BIG - Free Report) has a Zacks Rank #1 and a long-term earnings growth rate of 7.1%.
Zacks’ Single Best Pick to Double
From thousands of stocks, 5 Zacks experts each picked their favorite to gain +100% or more in months to come. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all.
With users in 180 countries and soaring revenues, it’s set to thrive on remote working long after the pandemic ends. No wonder it recently offered a stunning $600 million stock buy-back plan.
The sky’s the limit for this emerging tech giant. And the earlier you get in, the greater your potential gain.
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