Walmart has acquired a whopping 77% stake in India's largest online retail ecommerce company flipkart for 16 billion dollars.
Some of the big questions hanging over the proposed deal include why Walmart wouldn’t instead use some of these funds to try to narrow its massive gap behind Amazon in the U.S., and whether Walmart really gives Flipkart an advantage in India to help it win long-term.
But there is a whole bunch of data in Walmart’s corner that supports the risk it is taking. At a very high level, it starts with the size of India — it’s the second-most-populous country in the world, just behind China. Of course, that size alone doesn’t matter — rather, it’s the shifting behavior of Indian consumers.
India is home to a growing middle class, fueling household spending growth on par with that of China — and at a faster pace than the more mature U.S. market.
What’s more important to Walmart than the current size of the market, though, is its anticipated growth. From 2017 to 2021, online retail in India is expected to grow 141 percent to more than $50 billion.
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| World bank data |
