The future of e-commerce in India increasingly looks like an all-American affair

India’s technology industry is bracing itself for the next era of e-commerce warfare, which looks set to be waged and bankrolled by two gigantic corporations located halfway across the world: Amazon and Walmart.

Amazon is already deeply committed to the country, where it has pledged to deploy more than $ 5 billion to grow its business, and now U.S. rival Walmart is said to be inching closer to a deal to buy Flipkart.

Bloomberg reports that Walmart is poised to acquire 60-80 percent of the company for $ 12 billion. The deal could potentially value Flipkart as high a $ 20 billion, which would be a major jump on the $ 12 billion valuation it secured last year when it landed a $ 1.4 billion investment from Microsoft, Tencent and eBay.

Amazon was said to have made a last-minute move to conduct talks with Flipkart, but it seems now that there is intent for Walmart to take the deal, with Flipkart’s founders said to be in favor. Bloomberg cautioned, however, that there are still unresolved issues — including which shareholders will sell, how much they will sell, and whether the Flipkart leadership remains — while there’s also no guarantee that the talks don’t break down.

That said, it is reported that Tiger Global plans to sell nearly all of its 20 percent share and SoftBank will offload “a substantial part” of its 20-percent-plus holding.

At stake is a growing online sales market as more of India’s 1.4 billion population comes online for the first time.

India is tipped to reach 500 million internet users by June 2018, according to a report from the Internet and Mobile Association of India (IAMAI) and Kantar IMRB. That’s up from 481 million six months prior, but internet penetration in rural areas is at just 20 percent compared with 65 percent in urban India. That rush online has led some analysts to predict big gains for online retail, with Morgan Stanley forecasting that 30 percent annual growth in GMV will take India’s e-commerce market to $ 200 billion by 2026.

Walmart’s increased focus on India comes after the retailer exited the Chinese market in 2016, selling its Yihaodian service — which it first backed in 2011 — to Alibaba rival JD.com. That deal also saw Walmart work closely with JD.com, essentially using the company as a storefront to reach Chinese consumers.

With the China exit complete, it was then linked with an investment in Flipkart last year. Fast-forward to today and it is poised to take a very major role in India via Flipkart, which most reports indicate remains India’s top e-commerce firm despite Amazon pushing it hard.

Amazon itself is keen to diversify. The company recently announced it has more than 100 million Prime members worldwide, having added “more members in India in its first year than any previous geography in Amazon’s history” thanks to an array of promotional offers run with local companies, including telecom operators.

Now the firm is aiming outside of its core e-commerce focus, with Amit Agarwal — the head of Amazon India — telling Reuters that he expects groceries and household products to account for half of its revenue in the country within the next five years.

Outside of Flipkart and Amazon, Alibaba has invested considerably in Paytm, which specializes in mobile payments but also includes e-commerce, digital banking and has plans for gaming. Long-time Alibaba ally SoftBank is also backing the company’s Paytm Mall effort — having led a recent $ 450 million investment — but the main battle looks like between Amazon and Walmart-Flipkart if things go as they are reported to be headed.

Walmart declined to comment. Flipkart did not respond to a request for comment for this story.

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