Google still searching for an answer on Flipkart minority stake buy

Tiger Global and Walmart have had at least five rounds of discussions with Alphabet to convince it to make an investment to the tune of $1-2 billion

Still considering the pros and cons of buying into the most-valued online marketplace in India, Alphabet Inc, the holding company that owns tech giant Google, has not yet decided on whether to acquire a minority stake in Flipkart, even as Tiger Global and Walmart Inc are making an effort to bring the search engine giant on board.

According to sources, both Tiger Global and Walmart have had at least five rounds of discussions with Alphabet to convince it to make an investment, which would be to the tune of $1 billion to $2 billion.

While Walmart and Tiger are trying to convince Google that the stake buy would help it gain access to the customer database of 175 million registered users, they are studying the trends in the user buying pattern so that it could be used for providing a more targeted search experience for its users and also push certain products accordingly.

“Google, which has already access to user data, is still trying to figure out what Flipkart would bring to the table. However, it is still considering buying a stake in Flipkart as it is the principal opponent to Amazon in India and with the right kind of tech push it would be able to take on Jeff Bezos-led tech giant,” said a source. Google declined to comment on whether or not it would buy a stake in Flipkart.

The other thing that the firm is concerned about is that the deal between Flipkart and Walmart has not been completed as SoftBank Group is still considering whether it wants to get out of the firm or not. 

Sources said that SoftBank Chief Executive Officer Masayoshi Son is yet to decide on selling the whole 21 per cent stake in Flipkart even as the time it took to think about it is up. 

Reports suggested that Son had asked for 10 days to decide what exactly he wanted to do with his stake. “Google wants the deal to fructify before it can take forward the discussion with Walmart,” sources added.

Experts believe that Flipkart, according to various independent studies, is still the largest e-commerce player in the country. It is still one of the most trusted brands not only in the metros but in tier-III cities, too. With the investment, Google would finally get a deep insight into the customer buying pattern. It is something that it has not been able to crack even after being the top search engine in the country and launching a payments platform.

“Google would get accurate user data on what all people buy. What searches users perform online are linked to what they buy. This data would help it get immense knowledge on each and every customer and help push products accordingly. After merger with Walmart, Google would be able to create a more than accurate customer profile,” said an analyst with an international consultancy.

The company is anyway bringing more people in the hinterland online and providing free Wi-Fi services to a host of public locations. It has more than 400 stations and is planning to bid for more. “The entry into Flipkart would help Google co-relate the data from the first click to the final delivery of product. This kind of knowledge is invaluable, something even Amazon does not have,” added the analyst.