Walmart is preparing to spend over $2.5 billion in India as the retailer doubles down on the opportunities it sees in India’s e-commerce and payments markets even as the firm contends with rising costs amid the market downturns.
Walmart spent about $780 million earlier this month in taxes after PhonePe, in which the retailer owns a majority stake, moved its domicile to India from Singapore. Walmart is also looking to invest between $200 million and $300 million in PhonePe’s ongoing funding round, according to a source familiar with the matter. (PhonePe declined to comment.)
The U.S. company, which owns majority stake in Flipkart, is now looking to spend about $1.5 billion to buy back the e-commerce firm’s shares from early backers Tiger Global and Accel Partners, Indian newspaper Economic Times reported Thursday.
India, the world’s second largest internet market, has become a key battleground for Walmart and Amazon.
Amazon has spent over $9 billion in India (including investments for AWS cloud regions in the country) over the past decade. Walmart, which missed the e-commerce race in the U.S., has coughed up over $20 billion on Flipkart and PhonePe to buy the lion’s share in India’s e-commerce and payments markets.
Flipkart leads the e-commerce market in India, according to Bernstein. And PhonePe commands over 40% of all transactions on UPI, a payments network in India built by a coalition of retail banks. UPI, which processes over 7 billion transactions a month, is the most popular way Indians pay online.
As Walmart makes splashy moves, its rival is taking a different approach. Amazon has spent the past few months streamlining its business in India. It has shut some of the newer bets — food delivery, wholesale distribution, and an attempt at online learning. But the company, by all accounts, appears to be continuing to invest in its core e-commerce business in India.
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