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Walmart is preparing to spend more than $2.5 billion in India, doubling the opportunities the retailer sees in India’s e-commerce and payments markets as the company struggles with rising costs amid a market downturn.
Walmart earlier this month paid about $780 million to Indian tax authorities after PhonePe, the retailer it owns a majority stake in, moved its headquarters from Singapore to India. Walmart is looking to invest between $200 million and $300 million in FonPay’s next funding round, according to a source familiar with the matter. (PhonePe declined to comment.)
The company, which owns a majority stake in Flipkart, is now looking to raise about $1.5 billion to buy the e-commerce company’s shares from its previous backers Tiger Global and Accel Partners, Indian newspaper Economic Times reported on Thursday.
India, the world’s second largest internet market, has become a key battleground for Walmart and Amazon.
Amazon has spent more than $9 billion in India (including investments for AWS cloud regions in the country) over the past decade. Walmart, which has overtaken the US e-commerce competition, has earmarked over $20 billion in Flipkart and PhonePe to buy the lion’s share of India’s e-commerce and payments markets.
According to Bernstein, Flipkart leads the e-commerce market in India. And PhonePe commands more than 40% of all transactions on UPI, a payments network built by a consortium of retail banks in India. Processing over 7 billion transactions per month, UPI is the most popular way for Indians to pay online.
While Walmart has made impressive moves, its rival is taking a different approach. Amazon He has spent the last few months streamlining his business in India. He hedged some new bets — catering, wholesale and experimenting with online education. But the company, by all accounts, seems to be continuing to invest in India’s leading e-commerce business.
India’s largest retailer, Reliance, secured the assets of US firm Retail Futures Group last year, with Amazon facing its most public fallout in the country. Amazon went public with its frustration, and then went into quiet mode.
In one of its first major announcements in India in two years, Amazon earlier this week launched Amazon Air in the country. But the company’s top country managers were not at the event, a person familiar with the matter said.
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