Ecommerce company Flipkart is in discussions to purchase a controlling stake in online travel aggregator Cleartrip and bolster its presence in an intensely competitive segment, people with knowledge of the matter told. The move by Flipkart, owned by US retail behemoth Walmart, is aimed at taking on rivals MakeMyTrip, Yatra, Booking .com and EaseMyTrip, among others as the domestic economy recovers and Indians who had deferred their holidays during the lockdown indulge in ‘revenge tourism’.
“Negotiations are on and the proposed deal is for the sale of a majority stake in Cleartrip,” said one of the persons, adding that the talks may or may not necessarily fructify into a transaction. Cleartrip’s financial performance has been hit due to travel and border restrictions imposed post the outbreak of COVID-19. Besides India, it operates in the UAE, Saudi Arabia, and Egypt.
Walmart acquired about 77 percent of Flipkart for around $16 billion in 2018, ratcheting up the competition with Amazon Inc in the booming Indian e-commerce market. In October 2020, Flipkart picked up a 7.8 percent stake in Aditya Birla Fashion & Retail for Rs 1,500 crore. Three months earlier, it had pumped in Rs 260 crore in Arvind Youth Brands, an arm of Arvind Fashions. It has also struck niche buyouts by acquiring augmented reality firm Scapic and social media gaming startup Mech Mocha.
At the company’s 2021 investment community meeting, president and CEO Doug McMillon said, “India is a market where we will step on the gas to ensure we have the appropriate level of investments in areas like the supply chain. We are well-positioned to grow as an emerging middle class spends more money through mobile phones. In India, our momentum and potential for growth make this a unique opportunity.”