Bengaluru-based online marketplace Flipkart had reportedly signed a non-disclosure agreement with Walmart before its team arrived from the US in India, to further its discussions of a strategic alliance between the two, according to two people close to the development.
This news comes as further development regarding the speculated deal between Flipkart and Walmart to take on ecommerce rival Amazon India. The companies are currently engaged in early talks and discussions on Walmart picking up a minority stake in Flipkart.
According to the same source, Walmart also held discussions with Snapdeal and other logistics companies as a part of their trip in India to gain complete understanding of the country’s ecommerce segment ahead of proposing any deal. Neil M Ashe, President and CEO, global ecommerce, Walmart spent “considerable time” at Snapdeal, the person stated.
“Walmart is studying all parts of the ecommerce value chain in India. They want a first-hand, deep understanding of what the market looks like, though they don’t have any immediate plans,” the person added.
As for the talks of a possible deal with Flipkart, the source stated that “the discussions are still at an early stage and it will take months of negotiations to arrive at any conclusion.”
In January 2016, Amazon and Walmart announced their plans to invest over $300 Mn (INR 2,000 Cr) in India with an aim to develop their network and to gain a share of the local retail market. Walmart also invested $53 Mn (INR 360 Cr) in December 2015 in its Indian unit. It also said that it planned to open over 50 new stores in India.
Amazon India focusses on bringing buyers and sellers to one online platform, on the other hand Walmart stores are catering to small retailers through wholesale trade.
This development was reported by ET.