It is well-known that Amazon is one of the dominating companies in the US e-commerce market.
This is because Amazon has been in this space for decades now. However, this is being challenged by the likes of Walmart and others in the US.
Walmart and other retailers that missed the e-commerce trend on which Amazon capitalized are now looking at other options.
The next best option for Walmart is to look at other markets where they could invest and take a majority stake, and so they did.
After the US, the biggest e-commerce market outside of China is India, and Walmart already has a majority company in India’s largest e-commerce brand Flipkart.
Apart from that, Flipkart has a UPI-based payments app known as PhonePe. Recently, Flipkart decided to make PhonePe a separate entity, whereas both were merged before this.
Now, it is reported by TechCrunch that Walmart is looking to invest $2.5 billion in India’s e-commerce and payments market thanks to its stake in Flipkart and PhonePe.
As per reports, Walmart, which has the majority stake in PhonePe, will invest $200 million to $300 million.
Apart from that, Walmart will invest $1.5 billion in Flipkart to buy back shares from investors such as Tiger Global.
This way, Walmart is fighting with Amazon in India’s e-commerce space rather than in the US.
On the payments front, Walmart-backed PhonePe controls 40% of the UPI transactions in the country, with over 4 billion transactions every month.
Amazon also launched Amazon Air earlier this month in India to make its deliveries even faster and possibly reduce costs, while Flipkart is yet to do anything in that direction.
Also, both Walmart-backed Flipkart and Amazon are facing stiff challenges from Reliance Industries’ JioMart, which is looking to expand rapidly in the Indian e-commerce market after disrupting the telecom sector in the country.