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US retailer Wal-Mart Stores is in talks with India's largest e-commerce firm Flipkart to invest as much as $1 billion to pick a minority stake and help fend local competition from Amazon, Bloomberg reported on Wednesday.
The final terms of the deal have not been worked out as negotiations are still underway, Bloomberg quoted an unnamed source as saying. A Flipkart spokesperson declined comment.
Wal-Mart's interest in Flipkart comes at a time when it is losing its home turf to Amazon as the online retailer expands into rural America, offering competitive deals and shipping to homes of consumers.
At the same time, Wal-Mart is also looking at expanding its India presence by opening more stores even as it explores an online presence in the country.
A possible tie-up between Flipkart and Wal-Mart will give the Indian company cash power to fight Jeff Bezos owned Amazon, which has committed over $5 billion to conquer India's e-commerce market, the world's largest open market. At the same time, Wal-Mart will get critical technology and market insights to step up its business online.
Flipkart has maintained that it is flush with funds to take on Amazon, while focusing on improving efficiency in its business and thereby profits.
"We are well capitalised to invest in technology, supply chain and to get to the next level of growth. One thing we should remember is that Flipkart has been in the top five companies globally to raise private capital. So that amount of capital is very meaningful. We have been very diligent and focused on spending that capital. Our complete focus is on growing the business, innovating for our customer and capital is not in my focus area," Flipkart co-founder and chief executive officer Binny Bansal said in an interview last week.
