How Amazon.com is better positioned to win the battle against Walmart

Background: Walmart Inc, the world’s largest retailer, took 77% equity stake in Flipkart, an Indian eCommerce company, on Wednesday. With Amazon.com establishing its presence organically, the fight to capture the Indian market has now shrunk to these two giants. So who has the better chance of winning this war?

Walmart is the world’s largest retailer, but its online rival, Amazon.com has better war chest when it comes to winning the Indian eCommerce market. Amazon’s cash at hand is thrice that of Walmart’s, though the online giant’s sale is only 36% of Walmart’s topline. Interestingly, Amazon.com has bigger long term debt than Walmart, but its interest cost is 50% lower than the offline retailer. Much more than cash at hand, Amazon’s valuation is thrice that of Walmart’s that gives US online retailer edge to acquire firms through non-cash transactions.

This table gives a preview of where the companies stand:

 

Walmart Inc. Amazon.Com, Inc
Cash 6.7 20.5
Sales 482 177.8
Net profit 15.08 3.03
Earnings Per Share (EPS) 3207 6.32
Market capitalization 252.35 776.43
Long term debt 36.7 45.6
Interest expenses 1.9 0.848

All in $ billion, except EPS
All numbers, except market capitalization, are December 2017.
Market capitalization is as May 9, 2018
Source: Company websites, NYSE

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