Flipkart just announced that its wholesale unit will acquire Walmart India, for an undisclosed sum. Walmart India’s brick and mortar business model is a key vertical for Flipkart, an ecommerce giant, to cross. Just a week ago, Flipkart announced raising $1.2 billion, from Walmart led investors, who valued the company at $24.9 billion. With this acquisition, they’ ve acquired over $650 billion in the B2B market in India. Flipkart’s entry into B2B will flare up competition from Amazon as well.
2 years ago, Walmart had acquired a 77% stake in Flipkart, for $16 billion. Now, Walmart’s entire retail operatus, will be consolidated under the Flipkart Group.
Flipkart plans to launch ‘Flipkart Wholesale’, in August. Flipkart’s senior Vice-President, Mr. Adarsh Menon, will be heading up the new B2B entrant. He told The Press Trust of India, “This marketplace is going to effectively link sellers and manufacturers on one end and kiranas and micro, small and medium enterprises (MSMEs) on the other end.” Flipkart will start with a focus on $140 billion of the $650 billion market, by competing in categories like fashion and grocery, against other heavily funded B2B entities, such as JioMart, Udaan.
Also Read: AP signs MoU with Amul to benefit farmers and women
Also Read: Boycott China ripple effect: Demand for Chinese rakhis falls ahead of Rakhi 2020
The companies released a statement detailing the acquisition. Walmart India’s nearly 3,500 employees will be transitioning to the Flipkart group, while the Best Price brand, owned by Walmart, will continue operation in its 28 storefronts, serving over 1.5 million people. Over the next year, the office teams will be integrated. The CEO of Walmart India, Sameer Agarwal, will stay on in order to ensure a smoother transition.
Flipkart has been increasing manufacturing engagements and supply chain capabilities since earlier in the year, They have begun offering retail to mom and pop stores, in Delhi NCR. Mr Menon, in a statement, said, “These businesses will have one-stop access to an extensive selection of products with attractive schemes and incentives, supplemented with data-driven recommendations for stock selection, delivered through a fast and reliable network to drive greater efficiencies and better margins.” Flipkart also plans to allow for more varied easy credit options, for kiranas and MSMEs.
Sameer Agarwal released a statement, saying, “A thing we saw through COVID-19 (outbreak) was kiranas are shopping in more omnichannel ways than before. In our Best Price business, we had a 4X increase in e-commerce within our business, which is primarily brick and mortar. What that tells us is that kiranas are very open to shopping both online and offline.”
Walmart India has a new, upcoming cash-and-carry store in Tirupati, while Walmart Labs India, will go on running a technological unit, under Walmart Inc.
Also Read: Air India from panel to select employees to be sent on leave without pay for 5 years
