The battle between (AMZN -0.15%) and Walmart (WMT 1.85%) is going global as the e-commerce leader is reportedly intent on upending the latter's acquisition of a majority stake in Indian online marketplace Flipkart.

Although Walmart has reportedly completed its due diligence to take at least a 51% stake in Flipkart, news reports say Amazon has made a competing bid Indian news site Factor Daily says Amazon may even be willing to offer as much as $2 billion as a breakup fee if regulators fail to approve the purchase. This looks like a bidding war shaping up for a premier site in what is seen as the next big online growth market after the U.S. and China.

Woman with a credit card and a laptop

Image source: Getty Images.

Eyes on the prize

Walmart is reportedly willing to pay between $10 billion and $12 billion for the majority position, a price tag that would value Flipkart at around $21 billion. But Amazon's interest could push the price tag up.

Amazon has narrowed the gap considerably between itself and Flipkart in India, garnering an estimated 31% share of the online market compared to its rival's 32%, though Flipkart's share grows to almost 40% if you include its fashion labels Myntra and Jabong. An Amazon-Flipkart union would be nearly unbeatable, and something Walmart would want to stop.

Even though India currently accounts for a relatively negligible percentage of Walmart's $500 billion in annual revenue, the retailer has identified the country as one of its core growth markets. E-commerce there is expected to reach $50 billion by the end of this year, so ceding ground to Amazon is not an option.

Previously Amazon said it was willing to spend big to take on Flipkart and had doubled the number of warehouses in India while committing to investing $5 billion in the country. It also timed a massive online sales promotion to coincide with one Flipkart had planned so as to undermine the competition.

During its fourth-quarter earnings conference call with analysts in February, Amazon noted "more Prime members joined India's Prime program in the first year than we've seen in any other country in the history of the world."

Replicating success around the world

Although Amazon is the e-commerce market leader in the U.S., Walmart still gives it a good run for its money. For example, the retail king's online order size is reportedly substantially larger than Amazon's, with a quarter of Walmart's orders exceeding $100, while 38% of Amazon's are less than $20. Walmart also bought for $3 billion in 2016 to improve its online push.

Moreover, Walmart's grocery service that allows customers to buy online and pick up in-store is now bigger than Amazon Prime and Amazon Fresh combined, and accounts for 17% of Walmart's total sales. But Amazon has responded by buying Whole Foods Market and giving the entire grocery industry a wake-up call.

For Walmart, being able to transfer its largely successful digital business to one of the world's biggest-growing economies is a prize worth fighting for.