Flipkart Acquires Walmart India, Launches Wholesale Online Marketplace for Kiranas
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Homegrown e-commerce major Flipkart has announced 100 per cent acquisition of Walmart India’s Best Price cash-and-carry business and launch of Flipkart Wholesale, a new online marketplace for Kirana stores.
This move comes about two years after Walmart had acquired 77 per cent stake in Flipkart Group for USD 16 billion. Two weeks back, the US-based e-commerce giant, along with a clutch of existing stakeholders, had pumped USD 1.2 billion in equity in Flipkart, notching up the latter’s valuation at USD 24.9 billion.
Set to be launched in August 2020, Flipkart Wholesale will pilot services for the grocery and fashion segments. Adarsh Menon, senior vice president and head, private brands, electronics and furniture will be heading it.
“With the launch of Flipkart Wholesale, we will now extend our capabilities across technology, logistics and finance to small businesses across the country,” Kalyan Krishnamurthy, CEO, Flipkart Group said in a statement.
Flipkart's wholesale marketplace will compete with the likes of Udaan, the fastest unicorn in the country, Amazon’s B2B vertical, Indiamart and Reliance Industries-owned JioMart, which was launched in May this year.
With this acquisition, Flipkart aims to leverage the strong wholesale capabilities of Walmart and enable growth and prosperity for kiranas and Micro, Small and Medium Enterprises (MSMEs). “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,” Krishnamurthy said.
Employees of Walmart India will join the Flipkart Group and the Best Price brand will continue to with its omnichannel network of 28 stores and e-commerce operations, the company stated.
Commenting on the same, Sameer Aggarwal, CEO, Walmart India, said, “This move (launch of Flipkart Wholesale) recognises the critical role that kiranas and MSMEs play towards India’s economic prosperity and growth, and the coming together of Walmart India with Flipkart Wholesale will provide an opportunity to build upon the 12+ year legacy of the Best Price brand serving kiranas across India.”
Aggarwal will hand over the reins to Menon gradually to ensure a smooth transition and then move to another role in Walmart, as per the company statement.
As the e-commerce battle in India intensifies, this deal along with the Walmart-led investment of USD 1.2 billion earlier this month indicate at Flipkart’s ramped up efforts to grab a piece of the kirana stores pie, claimed to be the next big promising segment by experts. Jio Platforms, a digital services unit of Reliance Industries, has closed investments of about INR 1.5 lakh crore from 14 leading global investors, including tech giants Facebook and Google, as it looks to disrupt the online commerce space.
RIL's online grocery delivery service JioMart will closely work with WhatsApp to create growth opportunities for millions of Indian small merchants and grocery shops, RIL Chairman Mukesh Ambani had stated during the company's virtual annual general meeting.