Walmart bought India’s biggest e-commerce company. Can it really hold off Amazon?

Walmart announced plans on Wednesday to buy a 77 percent stake in Flipkart, Amazon’s main e-commerce rival in India. The same day, eBay announced that it was selling its minority stake in Flipkart and relaunching its own operations in the country. With those moves this week, India’s $27 billion online retail markets got a little more crowded as the some of the world’s largest e-commerce giants—Amazon, eBay, Alibaba, and Walmart—jostle for dominance.

Many analysts are predicting that India, the world’s second most populous country, will soon see a huge boom in its e-commerce markets. Morgan Stanley, for instance, predicts that the country’s market will grow more than 1,200 percent to $200 billion by 2026. (The U.S. e-commerce market in 2017, for comparison, was $453 billion.)

Walmart has been trying to enter India for the last decade and already has 21 brickandmortar outlets and plans to open another 50. Walmart’s purchase of Flipkart seems to be a move to enter the e-commerce market earlier.

“I think Walmart is making a long-term bet because the e-commerce sector in India is not very big compared to Chinese or American e-commerce,” said Surupa Gupta, a professor at the University of Mary Washington who studies international political economy. She noted that growth is going to depend on the wider availability of smartphones and internet, better online payment systems, more trust in online retailers, and the effectiveness of the tax reform that was passed in the country last year.

“The projection for huge growth in e-commerce by 2026 is based on this notion that all these developments collectively will lead to that big payoff,” she said. “There are a lot of moving parts that have to fall in place for this to be realized.” There has also been pushback against Walmart from local retailers and several political parties, who are concerned that it will hurt local businesses.

Flipkart was founded in 2007 by two former Amazon employees and soon became the biggest online retailer in the country. It was an early adopter of cash-on-delivery payments, which was important to its growth because many Indians at the time didn’t have access to credit cards or online payment platforms. “It was the first major Indian e-commerce company,” says Gupta.

Amazon entered India in 2013 and has since invested more than $5 billion to take on Flipkart. “Flipkart was concerned about American corporations entering the market because Amazon, for example, has deep pockets and Flipkart was already not making a lot of profit,” Gupta said.

Other major online retailers soon tried to make inroads in the country as well. Chinese e-commerce giant Alibaba entered the market in 2015 by investing more than $500 million for a 25 percent stake of Paytm, an Indian commerce, and mobile payment platform. Alibaba expanded its stake in the company with another $177 million in 2017. That same year, eBay sold its eBay India business to Flipkart and invested $500 million for a 5 percent stake in the company.

Flipkart is still the top e-commerce business in India, though Amazon is not far behind. The two companies are almost tied when it comes to electronics and other major product categories, but Flipkart has a 70 percent market share for clothing and accessories. As Quartz lays out, Walmart executives are looking to leverage Flipkart’s fashion business, as well as its digital payments infrastructure and local talent pool. Walmart’s latest investment should fortify Flipkart’s lead and may help it eventually go public.

Walmart’s latest investment also looks to be part of a larger strategy of teaming up with Amazon competitors around the world. The retailer has also partnered with local e-commerce players in Amazon strongholds such as Japan, China, and the U.K.

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