Google goes shopping for Indian e-commerce dominance … at Walmart

Google has invested in Walmart's Indian e-commerce operation Flipkart, which holds almost half of the market for e-commerce on the subcontinent.

The Chocolate Factory's planned role as a "minority investor" is subject to regulatory approvals, according to a Friday announcement [PDF] by the e-commerce concern.

"Google's proposed investment and its cloud collaboration will help Flipkart expand its business and advance the modernization of its digital infrastructure to serve customers across the country," Flipkart's missive added.

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

Like Amazon.com, Flipkart started life as an online book seller – its founders even did stints at Amazon before starting their own venture in 2007. Flipkart has since won an estimated 48 percent of India's e-commerce market – well ahead of Amazon (which came to India in 2013).

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

Flipkart's announcement reveals that Walmart led a new funding round, which saw Google come aboard.

While the announcement of Google's intentions for Flipkart offers only a brief hint of cloudy help, Google is no stranger to investing in e-commerce outfits – nor to India – and its previous activities in both spheres offer some clues.

In 2018, Google invested $550 million in Chinese e-commerce giant JD.com – a move that made Google Shopping more accessible in China.

A 2021 partnership between Google and Shopify saw merchants able to list products on Google Shopping for free – thus expanding Google's e-commerce presence without even having to pay for it.

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

At the time, CEO Sundar Pichai described the fund as "a reflection of our confidence in the future of India and its digital economy." India is an enormous market, has very much a mobile-first population of internet users, and is enjoying strong GDP growth that is creating a substantial middle class.

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

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

If past actions are any guide, Google's Flipkart investment could therefore see the e-tailer use more of the G-Cloud, become more prominent on the search giant's platforms, funnel profits to Alphabet, and create an asset that appreciates in value. ®