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Walmart Seeks Solid India Investment in Tata's Super App

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Walmart Inc. (WMT - Free Report) has certainly been pushing the edge of the envelope to strengthen its e-commerce operations. Toward this end, the world’s largest retailer has been exploring possibilities internationally. This was best highlighted when the supermarket giant scooped up a major stake in India’s e-commerce firm, Flipkart, back in 2018. Walmart is apparently taking another bold step in this arena, as sources revealed that the omnichannel retailer is in talks with India’s Tata Group to invest up to $25 billion in the latter’s new super app.

More About Super App

The planned super app is aimed at establishing a digital services giant with a broad range of offerings in the retail space, such as healthcare, food and grocery, as well as financial and insurance services. Expected to hit the India market in December or January, the super app can also be launched as a joint venture between Tata Group and Walmart, per various media reports. This will allow the app to benefit from the synergies between the e-commerce business of India’s salt-to-software conglomerate and Flipkart, whose major stake is owned by Walmart.

In fact, industry experts believe that if Walmart’s potential investment in Tata Group’s super app takes shape, it will mark India’s biggest deal in the retail space, beating the $16-billion investment of the former in Flipkart. Reports also suggest that Walmart has appointed Goldman Sachs (GS - Free Report) as the banker for the potential contract.

Undoubtedly, snapping up a stake in super app is likely to help Walmart strengthen its e-commerce footing in India and enable it to stay firm amid the fierce competition from Amazon (AMZN - Free Report) , which also has a solid presence in the country.

Walmart Continues to Strengthen E-Commerce Arm

Walmart is renowned for its efforts to step up the online game. Incidentally, the retail behemoth has been strengthening its online assortment by launching exclusive and premium brands. The company has introduced more than 1,000 apparel brands to its online collection. Toward this end, its alliance with thredUP (a re-commerce business) aims at serving customers per their evolving needs.

Apart from this, the company’s alliances with Shopify Inc. (SHOP - Free Report) and Green Dot and buyouts of ShoeBuy, Moosejaw and Bonobos, among others, underscore its intention to build an impressive digital brand portfolio. Further, the buyout of a major stake in Flipkart has been bolstering its e-commerce sales. Apart from this, Walmart is making aggressive efforts to expand in the booming online grocery space, which has long been a major contributor to e-commerce sales. Notably, Walmart U.S. e-commerce sales increased a whopping 97% in the second quarter of fiscal 2021, with strength across all channels.

Walmart’s concerted efforts to bolster its e-commerce business have been a treat for investors. Markedly, the Zacks Rank #2 (Buy) stock has rallied 14.5% in the past three months compared with the industry’s growth of 13.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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