Despite entering India as early as 2004, eBay failed to make a dent in the market here. But it will take some time for the business to turn profitable, and analysts on a Wednesday morning call about the deal adopted a cautious tone.
The American retail majors shares fell over 4 per cent on the New York Stock Exchange at around Dollars 82.13 apiece.
"What were once small urban areas will grow into commerce power centers as people and industry flock to these cities in the hope of new opportunities and an improved lifestyle", the book noted."We expect those losses to continue for a little while", Walmart's Chief Financial Officer Brett Biggs said in a phone interview.
Walmart has aggressively pushed into online sales in the U.S.to fend off Amazon. "And it fits right in with our strategy", Judith McKenna, Walmart's global chief executive officer, said in a phone interview. Son said his firm's investment in the Indian online retailer had grown to $4 billion.
The US giant's Indian stake outstrips the $10.8bn (then £6.7bn) price it paid for Asda in 1999, and comes weeks after it announced plans to pull out of the United Kingdom and sell the supermarket chain to Sainsbury's. That includes its decision last month to sell its British unit, Asda, which primarily operated a chain of traditional supermarkets.
Walmart, which operates stores under various banners in 27 countries outside the US, has faced strong headwinds in its expansion. The investment will include $2 billion of new equity funding and Walmart said it remains in talks with other potential investors to join the funding round. Fashion was the only category in which Flipkart maintained a significant edge.
"But strangely", the SJM said, "Walmart is using the e-commerce route to circumvent the rules to attack (the) Indian market".
The deal represents a missed opportunity for Amazon CEO Jeff Bezos, who has also failed to create a meaningful presence in China. The deal is the highest for any startup in India.
For Walmart, it is another way to tap into an $800-billion retail sector.
He said, "While eCommerce is still a relatively small part of retail in India, we see great potential to grow". "Nobody will be better positioned in Asia than we will be".
Jared Wiesel, partner at the tech-enabled consulting firm Revenue Analytics, said Walmart - which has traditionally operated physical stores - would also benefit from Flipkart's technological expertise.
The purchase is about "setting the company up for growth and profits in the future", CEO Doug McMillon tells investors.
The company retreated from Britain, selling a controlling stake in its British arm ASDA to J Sainsbury Plc.
Binny, not related to Sachin, will retain his 5.5 per cent stake and will be Chairman of the company's Board. Founded in 2007 by two college friends and former Amazon employees, Flipkart began life as an online bookseller.