Google invests $350 million in Flipkart

The Indian e-commerce market was thought to be largely stabilized, with only Amazon-owned Flipkart and Walmart in the fray, but a huge new competitor has thrown itself into the ring.

Google has invested $350 million in Flipkart. Google’s investment is part of Flipkart’s just announced $1 billion funding round. Flipkart’s largest shareholder, Walmart, also participated in this round, infusing $600 million of its own money into the company. This round keeps Flipkart’s valuation relatively stable at $35-36 billion.

“As part of the latest round of financing led by Walmart, Flipkart today announced that it will add Google as a minority investor, subject to regulatory and other customary approvals from both parties,” a media statement said. 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.

This is an interesting trick by Google, which has already tried its hand at e-commerce in India. Back in 2017, Google launched an app in India called Areo that provided food delivery and home services. The app was pilot tested in Bangalore and Mumbai and did not see much uptake before it was discontinued.

Google has now decided to support Flipkart, one half of the e-commerce duopoly that currently exists in India. It makes sense for Google to support Flipkart over Amazon – while Google doesn’t particularly compete with physical retailer Walmart, its Google Cloud service competes directly with Amazon’s AWS. Hence, Google seems to have played a role in the Indian e-commerce space by choosing Walmart over Amazon.

Google’s investment also seems to reaffirm the company’s faith in the Indian e-commerce space. Some of Google’s investments in India haven’t quite panned out – Dunzo, for example, is on the brink. But even though the e-commerce space in India isn’t growing as fast as it used to be, and the valuations of both Amazon and Flipkart haven’t changed much since Covid, Google has shelled out a handsome amount for Flipkart. Time will tell whether Google’s support will help Flipkart fight Amazon for supremacy, but the Indian e-commerce space is now also an indicator of the rivalry going on between Amazon and Google in the US.