NEW YORK (TheStreet) --Walmart (WMT) - Get Report is reportedly interested in making a $1 billion investment in Flipkart, India's largest online retailer, according to the Financial Times. The report comes after Walmart acquired online retailer Jet.com, and Amazon.com's (AMZN) CEO Jeff Bezos announced plans to ramp up investments in India.
"Jeff Bezos has committed in total at least $5 billion in India building out Amazon in the market. It's not hard to see this rumored investment by Walmart in Flipkart as a reaction," Spark Capital general partner Megan Quick said on Wednesday's "Squawk Alley" on CNBC.
Moreover, CNBC reporter Seema Mody, who spent time working as a reporter in Mumbai, India, explained why it makes sense for Walmart to seek a partner in the world's second most populated country.
"Walmart for a long time has been trying to expand into India. They do have some stores there, but partnering with a local partner seems to be a viable strategy, because there are a lot of regulatory headwinds foreign companies face when trying to enter India," Mody explained.
Currently, because Walmart falls under the multi-brand sector, it is allowed to invest up to a 51% stake in an Indian company. However 30% of that must be locally sourced.
"There's this massive audience of very hungry consumers that are coming online via mobile and ready to make a lot of e-commerce purchases," Quick added. "There's this massive audience of very hungry consumers that are coming online via mobile and ready to make a lot of e-commerce purchases."