Their conjecture turned out to be right. However, Walmart had also approached other local e-commerce firms including Snapdeal. Over the last year, Walmart’s seriousness about making a minority investment in an Indian retailer had grown considerably. Its executives wanted to avoid making a late entry here, their anxieties intensified by the sight of Amazon charging ahead. Walmart had also become more confident about the market. It had been running a wholesale unit in India since 2013 which was advancing nicely.
In September 2017, a meeting was set up between Binny Bansal and Dirk Van den Berghe. An imposing Belgian in his fifties, Dirk had been promoted to CEO of Walmart Canada and Asia a few months ago. Binny and Dirk met over breakfast in a private suite at a five-star hotel in central Bangalore. Binny expressed his admiration for Walmart and expressed his hope that the two companies could work together. Flipkart had a lot to learn from Walmart, especially in the groceries business which was Walmart’s forte.
After this amicable first meeting, things moved quickly. Walmart had also met Snapdeal executives, but the company was in a shambles, shrinking in size every month, barely getting by. There was no comparing it with Flipkart, which by now was thriving again.
The following month, in October 2017, the Flipkart team flew to the Walmart headquarters in Bentonville, Arkansas, to carry on the discussions. The weather there was cold, with temperatures dropping to the single digits at night. Bentonville, a city with a population of less than 50,000, is an unlikely base for a retailing behemoth. In such a small southern American city, it is startling to spot a number of Indians, who have moved there to fill up the satellite offices of IT firms. Expectedly, Walmart’s presence is inescapable. The company is the city’s biggest employer, its stores and offices are landmarks. Walmart also maintains a museum that records the company’s history since its founding in 1962. Some of the older residents in the city personally knew Sam Walton, the company’s founder who died in 1992.
At the Walmart offices, the Flipkart executives met with Doug McMillon and other senior leaders of the company. Doug was only the fifth CEO in Walmart’s history. He was a Walmart lifer, having joined the company as a teenager. At fifty-one, he had already been CEO for four years. Doug had steadied Walmart after its image had been tainted by a bribery scandal in Mexico. He had made some bold moves, buying several online retailers and increasing the use of technology in Walmart’s operations. He was known as an ‘intensely friendly’ CEO.5
Doug was taken with the Flipkart team, particularly by Sachin, who came across as a sincere, innovative entrepreneur. The Flipkart executives returned to Bangalore at the end of the month, confident that a sale of five to ten per cent of the company’s shares would soon be finalized. A strategic partnership with the American retailer would surpass all previous deals, including the gigantic SoftBank funding. Walmart was the most feared name in retail and its determination to prevail over Amazon was even stronger than Flipkart’s own. With the might of Walmart, SoftBank and Tencent backing Flipkart’s, Amazon would face an uphill task in overtaking its local opponent.
By now, Flipkart had already posed a direct question to Amazon: did it want to continue battling Flipkart? At an elite financial services conference in the US – around the time Walmart had approached Flipkart – Sachin had come across a known but unfamiliar rival: Jeff Bezos. He had wondered if he could tempt the Amazon founder – whose eagerness to succeed in India was well-established – into making a bid for Flipkart. Sachin had known that Bezos would be attending and had prepared extensively for the meeting. He had assembled data on the latest sales, losses and other business metrics at both Flipkart and Amazon India. He presented to Bezos these numbers which showed that Flipkart was still comfortably ahead of its rival in sales despite spending far lesser. This was because of the superior local knowledge and innovative abilities of Flipkart, claimed Sachin. Flipkart now had more cash than ever and it was only going to get stronger, he insisted. Did it then make sense for both companies to keep burning cash by fighting each other? Wouldn’t it be better to join forces, combine each other’s strengths and dominate the market profitably, asked Sachin of the Amazon founder.
Sachin had his own reasons for courting Bezos. He saw a deal with Amazon as his shot at redemption. The entry of a powerful new investor would considerably diminish the influence of Tiger Global, and by extension, of Kalyan Krishnamurthy. With a new partner, Sachin could start afresh and resume his $100 billion mission. To Sachin’s surprise, Bezos expressed interest. He had respect for how Flipkart had fought off Amazon so far. He also found Sachin to be very impressive, and his arguments persuasive.
Bezos tasked a senior acquisitions specialist at Amazon to look into the possibility of buying Flipkart. But as this Amazon official spoke with Sachin and the Flipkart team, it became clear that the engagement would be fruitless. Just
