Google Seeks Indian E-Commerce Dominance… at Walmart • The Register

Google has invested in Walmart’s Indian e-commerce company Flipkart, which has almost half of the e-commerce market in the subcontinent.

According to Friday’s announcement (PDF) from the e-commerce concern, the planned role of Fabryka Czekolady as a “minority investor” requires regulatory approvals.

“Google’s proposed investment and cloud collaboration will help Flipkart expand its business and accelerate the modernization of its digital infrastructure to serve customers across the country,” Flipkart added in its announcement.

While Flipkart did not specify the amount Google is investing, Reuters pegged the minority stake at $350 million, valuing Flipkart at $37 billion.

Like Amazon.com, Flipkart started as an online book retailer – its founders even worked at Amazon before starting their own venture in 2007. Since then, Flipkart has captured about 48 percent of the Indian e-commerce market – well ahead of Amazon (which arrived in India in 2013).

American mega-retailer Walmart liked Flipkart so much that it bought 77% stake for $16 billion in 2018,

Flipkart’s announcement shows that Walmart has led a new round of funding, with Google joining.

While the announcement of Google’s plans for Flipkart offers only a brief hint of vague help, Google is no stranger to investing in e-commerce hardware – nor is India – and its previous activities in both areas provide some clues.

In 2018, Google invested $550 million in Chinese e-commerce giant JD.com, which increased the availability of Google Shopping in China.

Thanks to the Google and Shopify partnership in 2021, sellers were able to list products on Google Shopping for free, thus expanding Google’s e-commerce presence without even having to pay for it.

In India, Google has pledged to spend $10 billion on a digitization fund that will run for five to seven years.

CEO Sundar Pichai then described the fund as “a reflection of our belief in the future of India and its digital economy.” India is a huge market with a large mobile-first internet user population and strong GDP growth that is creating a sizeable middle class.

Google’s first investment through the fund was to send $4.5 billion to Jio Platforms in exchange for a 7.73% stake. Jio then created an entry-level Android smartphone – the Jio Next for around $85 – and made it its flagship device.

Jio Platforms and its subsidiaries do more than just provide telecom services and smartphones. They also play in areas including payment systems, streaming TV and e-commerce.

If past actions are any indication, Google’s investment in Flipkart could therefore result in the online retailer making greater use of G-Cloud, becoming more visible on the search giant’s platforms, redirecting profits to Alphabet and creating an asset that appreciates in value. ®