Investment would help both companies battle Amazon in market

MUMBAI — Walmart is in talks to buy a stake in Indian e-commerce company Flipkart, Thomson Reuters reported today, citing sources familiar with the matter. Walmart is reportedly eyeing a stake of 40% or more in India’s largest online marketplace.

An investment from Walmart would give Flipkart muscle in its battle with Amazon.com, which has committed to investing $5 billion in India as it seeks a bigger role in grocery deliveries, Reuters reported.  Flipkart also has been looking at getting into grocery deliveries.

“Walmart’s expertise in selling groceries and low-cost apparel could help Flipkart remain ahead in India’s e-commerce market,” Satish Meena, senior analyst at Forrester, told Reuters. Flipkart, founded in 2007 by two former Amazon employees, now accounts for 40% of India’s online retail sales, according to Forrester estimates.

Walmart has been bolstering its e-commerce platform in India, where the retailer has long been blocked from entering the retail market on its preferred terms due to restrictions on foreign investment. Walmart is restricted to 21 “cash and carry” wholesale businesses, which sell items in bulk to hotels, restaurants, mom and pop shops known locally as kirana stores and other businesses.