Walmart reportedly in talks with Flipkart for an equity partnership

Indian e-commerce market is getting hotter by the day. After Alibaba, Rakuten, it’s the world's biggest retailer Walmart Store that is eyeing the lucrative Indian region and is reportedly in talks with local e-commerce giant Flipkart for an equity partnership, according to ETTech.

Citing two people familiar with the matter, the report says that the two companies are currently in the initial stages of talks and discussions on Walmart picking up a minority stake in India's largest e-commerce company.

In a clear move to take on their common rival- Amazon, the ‘strategic deal’ between the two could be similar to the one that the Walmart forged with JD.com in China. In June this year, it acquired around 5 percent stake in JD.com, which is the second largest Chinese e-commerce marketplace, for about $1.5 billion.

Though the details of the purported deal are still under wraps, it would be a shot in the arm for Flipkart in its fight against Amazon India. On the other hand, Walmart will get a foothold in one of the world’s largest market.

Also, this could allow India etailer Flipkart to leverage Walmart’s global supply chain, increase efficiency in procurement and product assortment. Walmart’s Best Price wholesale stores that are currently present in several locations in India, such as Jammu, Chandigarh, Guntur, Lucknow, etc., could also be used as pickup and delivery points for Flipkart.

Amazon’s growing clout is a matter of concern for both Flipkart and Walmart. Amazon and Walmart are arch rivals in the US with the former growing faster over the past few years. In 2015, Amazon's revenue grew by 20 percent to $107 billion ($99 billion from online sales, the rest from Amazon Web Services) while Walmart's sales declined by 0.7 percent to $482 billion.

Walmart, in order to shore up its online presence, recently acquired Jet.com in the US, for about $3.3 billion in the largest-ever purchase of an e-commerce company.

Flipkart also isn’t having an easy road presently due to lack of funds and top-level management exits. Despite that, online retailer recently crossed the 100 million registered users mark. As a group, Flipkart has a 70 percent share of the online fashion business in India and nearly 45 percent of e-commerce market share.