The Flipkart story: a $20bn exercise in smokes and mirrors

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The latest news out of the vibrant Indian e-commerce sector is that US retail giant Walmart appears to be on the verge of the country’s largest homegrown start-up – Flipkart. It is a move that would likely bring the ongoing turf war between Amazon and Walmart into the sub-continent and is expected to cost the US retailer around $20bn. But what is it actually buying? In 10 years of operations Flipkart has yet to post a profit, and this blog from Freightwaves argues that Walmart should think hard before agreeing a deal: “To an extent, it looks like Flipkart’s business model lives and dies with the largesse of its investors. Buoyed on by the growth potential of the Indian e-commerce populace and the presence of an investor pool ready to bail it out when pushed to a corner, Flipkart has grown as a company and made a veritable name for itself as one of the largest e-commerce players in the Indian ecosystem.”