A Wal-Mart store in India. Image Source: Wal-Mart.

Months after making the biggest U.S. acquisition of an e-commerce company in history with its $3.3 billion purchase of Jet.com, Wal-Mart (WMT -0.30%) is back at it again.

According to Bloomberg, the world's largest retailer "is in advanced discussions to invest as much as $1 billion into Flipkart Online Services," India's largest online retailer. When rumors arose that Wal-Mart was in talks to buy Jet.com, the company announced a deal just days later, so it wouldn't be surprising to see yet another announcement in the coming days.

The news comes at a time when India is becoming an increasingly important focus of companies like Amazon.com (AMZN -2.22%), which see tremendous growth in the world's largest democracy. With more than a billion consumers and a fast-growing economy, India may one day become a growth engine in the way that China is today.

What is Flipkart?

Founded in 2007 by two former Amazon employees, Flipkart has grown to a valuation of $16 billion, making it India's most valuable start-up. Its homegrown talent has helped the company master a difficult country to do business in, one where hundreds of languages are spoken, few people have credit cards, and the infrastructure is unreliable.

The founders surprised many by proving that e-commerce could work in India, but after several years of strong growth, sales are slowing, not least because of Amazon's efforts on the subcontinent. Amazon CEO Jeff Bezos has pledged to invest $5 billion into the Indian market, and the voracious e-commerce giant has a no-holds barred way of competing, promising to open a network of warehouses and do more last-mile deliveries.

Now enter Wal-Mart.

My enemy's enemy is my friend

Just as Jet.com and Wal-Mart are teaming up to take on Amazon at home, so it seems that Wal-Mart is making a similar play with Flipkart in India. The retail giant has had mixed results in its adventures abroad. It has become a dominant retailer in Mexico and in other parts of Latin America but has struggled at times in Europe, and its performance in China has also been underwhelming. The company recently sold its Chinese e-commerce site Yihaodian for a 5% stake in JD.com, the No. 2 e-commerce site in China.   

Wal-Mart India owns and operates 21 Best Price stores and previously partnered on a joint retail venture with Bharti Group, the country's largest telecom operator. That business was unsuccessful, however, and Wal-Mart sold its stake in the venture.

A deal with Flipkart could be significant for both companies. Flipkart could use a $1 billion cash infusion from Wal-Mart to further expand and fend off Amazon, and both companies could benefit from each other's expertise. Wal-Mart has years of experience with things like marketing and building complex logistical systems, and Flipkart has come up with creative solutions for tackling operations in developing countries. An investment in Flipkart would also give Wal-Mart a strong horse in what will be one of the biggest e-commerce markets, while it's still developing. Wal-Mart seems to have learned its lesson from the U.S., as it waited much too long to take on Amazon directly in the domestic market, where it now has a near-insurmountable lead.

A playbook for taking on Amazon

Following the Jet.com acquisition, it's becoming clear that Wal-Mart is hoping to become a force in e-commerce in part by swallowing other companies. There's nothing wrong with its strategy, and in fact, it shows some wisdom -- Wal-Mart's biggest advantage may be its deep pockets and the fact that it isn't Amazon, as nearly every other online retailer is feeling the heat from the undisputed leader in the space. Amazon itself has employed a similar strategy throughout its history. Acquisitions like Zappos.com, Diapers.com-parent Quidisi, which shares a founder with Jet.com, and Kiva Technologies have helped establish Amazon in various markets.

Since taking the helm in 2014, CEO Doug McMillon has promised to devote more attention to e-commerce, and Wal-Mart finally seems to be following through on that promise. It has scaled back on new store openings to save on capital expenditures, and it has rapidly expanded its online grocery pickup program, which has been well received. Its acquisition of Jet.com and potential partnership with Flipkart will add momentum to those efforts. Challenging Amazon won't be easy, but Wal-Mart is taking the right steps to establish itself in markets with the biggest opportunities.