Amazon.com revealed a stunning statistic last month when it announced that its Prime service had hit more than 100 million subscribers worldwide.
Its largest American competitor, Walmart, may have just captured as many new customers in India alone.Walmart on Wednesday announced a $16 billion deal to purchase 77 percent of the Indian e-commerce service Flipkart as part of its strategy to capture a piece of a fast-growing and increasingly tech-savvy market. The Flipkart deal, one of the largest and riskiest in Walmart’s history, follows a pattern of purchases over the past 18 months that includes a men’s clothing brand and a delivery start-up.
The deals were driven, in large part, by the reality that Mr. Walton’s strategy needs an update for a digital shopping age dominated by another behemoth: Amazon.
“For Walmart, this is the only way left to enter the Indian market and they are paying a premium for the access,” said Satish Meena, a Forrester analyst based in New Delhi. “This will provide them around 54 million active online buyers and a company with 40 percent of the Indian online retail market.”
Walmart’s acquisition changes that dynamic. Now, the retailer can help launch Flipkart’s grocery services to compete with Amazon’s. And Walmart can give Flipkart a boost in its fashion and clothing category, especially for low-to mid-priced products.
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