Google has decided to invest in Flipkart, which is Walmart’s Indian e-commerce operation and holds a significant share of the e-commerce market in India. The investment is contingent on regulatory approvals, as stated in an announcement by Flipkart. This collaboration is expected to help Flipkart expand its business and improve its digital infrastructure to better serve customers across the country.
While the exact amount of Google’s investment was not disclosed by Flipkart, Reuters reported that the minority stake amounts to $350 million, valuing Flipkart at $37 billion. Flipkart, which initially started as an online book seller in 2007, has since captured a large portion of India’s e-commerce market, surpassing Amazon’s presence in the country.
In 2018, Walmart acquired a 77 percent stake in Flipkart for $16 billion, showcasing its interest in the company. The recent announcement reveals that Walmart led a new funding round in which Google also participated. Google’s previous investments in e-commerce, such as the $550 million investment in Chinese e-commerce giant JD.com in 2018, indicate its growing involvement in the industry.
Moreover, Google’s partnership with Shopify in 2021 allowed merchants to list products on Google Shopping for free, further expanding its e-commerce offerings. In India, Google has committed to investing $10 billion in a digitization fund aimed at supporting the country’s digital economy. This initiative demonstrates Google’s confidence in India’s potential as a market with a growing middle class and a mobile-first internet user base.
Through its fund, Google has made significant investments in companies like Jio Platforms, exchanging a stake for funding to develop affordable Android smartphones. Jio Platforms’ diverse interests in telecom, smartphones, payment systems, streaming television, and e-commerce highlight the potential for collaboration and growth in the Indian market.
Overall, Google’s investment in Flipkart is expected to lead to increased utilization of Google’s cloud services, enhanced visibility on Google platforms, and ultimately contribute to the growth of Alphabet’s assets. This strategic move aligns with Google’s broader efforts to expand its presence in the e-commerce sector and capitalize on the growing digital economy in India.
Article Source
https://www.theregister.com/2024/05/27/google_invest_flipkart/
