Having successfully employed video as a strategy to attract Internet consumers to its business, Walmart-owned Flipkart is now eyeing a bigger role in the video content industry. Flush with the buying capacity that Walmart has brought on the table, India’s largest e-commerce platform is now looking to buy a stake in Star India’s Hotstar, according to a report on Mint.
While talks have happened, the deal is yet to reach an advanced stage. People familiar with the matter, who have spoken to Mint on condition of anonymity, have said that the talks may or may not result in a transaction. Nevertheless, this is indeed a major development, considering how India has become the epicentre as streaming companies like Netflix and Amazon Prime turn to India in search of consumer growth.
Flipkart’s move for a stake shouldn’t come as a surprise though. Under Kalayan Krishnamurthy’s leadership, the e-commerce giant has been looking to do outright acquisitions/stake-buying in tech startups within India. The move includes companies like BookMyShow, Urban Ladder among other high profile names.
The strategy behind this renewed aggression towards large-scale spending and buyouts looks pretty clear — diversification of business (similar to what Amazon did with Prime and AWS) and reducing dependence (which is hugely skewed at the moment for Flipkart) on categories like smartphones and large appliances.
While business diversification remains an agenda, the company has also realised over time the importance of video content in attracting internet consumers. Flipkart had tried to forge alliances with Netflix as well along similar lines, but that did not materialise. With Hotstar, Flipkart already has a running alliance, and is now looking to bolster it even further with this stake buy-out.
Responding to the Mint story above, a Hotstar spokesperson replied to the newspaper with the following emailed response :
This query has no basis in facts. No such conversation is happening with Flipkart or any others. We are well resourced and on a velocity of growth that is ahead of almost every other consumer Internet company in India. As flattered as we are by the rumours, the service is too valuable for such conjectures to be even entertained,
However, we remain open to partnerships that can help grow the Internet ecosystem in India and beyond,