Walmart to Invest an Additional $2.5 Billion in India’s E-Commerce and Payment Sector
- ByStartupStory | January 27, 2023
Walmart is planning to invest more than $2.5 billion in India’s e-commerce and payment markets, despite facing increased expenses during market downturns, as the company sees potential growth opportunities in the country.
In January, Walmart recently incurred $780 million in taxes as a result of PhonePe, in which the retail giant holds a majority stake, relocating its headquarters to India from Singapore. Furthermore, sources indicate that Walmart is planning to invest between $200 million and $300 million in PhonePe’s current funding round.
The U.S. company, which owns a majority stake in Flipkart, is now looking to spend about $1.5 billion to buy back the e-commerce firm’s shares from early backers Tiger Global and Accel Partners.
India, the world’s second largest internet market, has become a key battleground for Walmart and Amazon. Amazon has spent over $9 billion in India (including investments for AWS cloud regions in the country) over the past decade. Walmart, which missed the e-commerce race in the U.S., has coughed up over $20 billion on Flipkart and PhonePe to buy the lion’s share in India’s e-commerce and payments markets.
According to Bernstein,Flipkart leads the e-commerce market in India and PhonePe commands over 40% of all transactions on UPI, a payments network in India built by a coalition of retail banks. UPI, which processes over 7 billion transactions a month, is the most popular way Indians pay online.
While Walmart is making bold moves, Amazon has been taking a different strategy in India by simplifying its operations. Recently, the company has closed down several of its newer initiatives such as food delivery, wholesale distribution, and online learning. However, Amazon is believed to be still investing in its primary e-commerce business in India.
Amazon experienced a significant setback in India last year, when Reliance outmaneuvered the company in acquiring the assets of retail giant Future Group. Amazon publicly expressed their disappointment and then went quiet. Recently, the company made a major announcement in India by launching Amazon Air, but the top country managers were not present at the event, according to a source familiar with the situation.
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