Walmart is poised to spend more than $2.5 billion in India, with retailers doubling down on opportunities seen in India’s e-commerce and payments market, but the company faces rising costs amid a market downturn. It is working.
Walmart spent about $780 million on Indian tax authorities earlier this month after PhonePe, in which it majority-owned, moved its headquarters from Singapore to India. Walmart is also considering investing between $200 million and $300 million in PhonePe’s ongoing funding round, according to sources familiar with the matter. (PhonePe declined to comment.)
The company, which owns a majority stake in Flipkart, is now considering spending about $1.5 billion to buy back stake in the e-commerce company from early backers Tiger Global and Accel Partners, according to an Indian newspaper. The Economic Times reported Thursday.
India, the world’s second largest internet market, has become a key battlefield for Walmart and Amazon.
Over the past decade, Amazon has spent over $9 billion in India (including investments in AWS cloud regions in the country). Walmart, which has missed the e-commerce race in the US, has invested more than $20 billion in Flipkart and PhonePe to capture the largest share of India’s e-commerce and payments market.
According to Bernstein, Flipkart leads the Indian e-commerce market. PhonePe also commands more than 40% of all transactions on UPI, an Indian payments network built by a coalition of retail banks. With over 7 billion transactions processed each month, he said UPI is the most popular way for Indians to pay online.
While Walmart is making a splash, its rivals are taking a different approach.Amazon has spent the last few months streamlining its business in India. Some new bets have closed, including food delivery, wholesale, and online learning attempts. But the company, by all accounts, appears to be continuing to invest in its core e-commerce business in India.
Amazon faced a very public setback last year after India’s biggest retail giant Reliance outsmarted a US company to secure the assets of retailer Future Group. Frustrated, Amazon went public and went into silent mode.
In one of its first major announcements in two years in India, Amazon launched Amazon Air in the country earlier this week. However, the company’s top country manager was absent from the event, according to a person familiar with the matter.