Flipkart buys Walmart India, foraying into online wholesale
In a major move, homegrown e-commerce giant Flipkart has acquired Walmart India. The company has confirmed that it has taken a 100% stake in the Indian wholesale business of the American retail giant and will launch its own online wholesale marketplace, called Flipkart Wholesale, in the coming weeks. Here is all you need to know about it.
Goal to leverage Walmart India's wholesale presence
Flipkart has not shared the financial details of the acquisition, but the goal behind the decision is pretty clear - the company wants to use Walmart India's offline wholesale business to power the country's Kirana and MSME ecosystem. Walmart India owns and operates 28 Best Price Wholesale stores, and now, all of that will form the backbone of the Flipkart Wholesale digital marketplace.
Here's what Flipkart CEO Kalyan Krishnamurthy said on the development
"The acquisition of Walmart India adds a strong talent pool with deep expertise in the wholesale business that will strengthen our position to address the needs of Kiranas and MSMEs uniquely." The company also gets two Walmart India fulfillment centers as part of the deal.
Initially, Flipkart Wholesale will pilot across grocery and fashion categories
According to a statement from Flipkart, its wholesale marketplace will go on a pilot run starting August 2020. The company's Senior Vice President Adarsh K Menon will lead Flipkart Wholesale's effort to provide small businesses a wide selection of products at a significant value and with credit options. However, in the initial days, the company will only serve retailers across grocery and fashion categories.
Thousands of Kiranas have already partnered with Flipkart, says Menon
"Thousands of Kiranas have already partnered with Flipkart to enhance their business and income streams. We will leverage the synergies between Flipkart and Walmart India as we stay focused on transforming the wholesale experience for Kiranas and MSMEs."
What else is changing?
With this acquisition, as Krishnamurthy said, Walmart India's employees will join Flipkart Group. Sameer Aggarwal, the CEO of Walmart India, will remain with the company to ensure a smooth transition, but once that is done, he will move to another role within Walmart Inc., which currently owns a majority stake in Flipkart. The Best Price brand, meanwhile, will continue to operate.
Here's what Judith McKenna, Walmart International's CEO, said
"Today marks the next big step as Walmart India's pioneering cash-and-carry legacy meets Flipkart's culture of innovation. By leveraging each other's strengths and unique expertise, this team will break new ground in their shared mission to help Indian businesses grow and succeed."
This comes as Amazon and Reliance Retail continue to expand
The move to bring Flipkart and Walmart India together comes as the other two retail giants in the country, Amazon India and Reliance Retail, continue to grow their footprints. Not to mention, Amazon is already said to be in talks to buy a 9.99% stake in Reliance Retail, which, if confirmed, is sure to increase challenges for Flipkart-Walmart in the wholesale and retail industry.
