India’s online major Flipkart has acquired 100 per cent stakes in Walmart India, which operates the Best Price cash-and-carry business.
The firm has instead launched Flipkart Wholesale – a new digital marketplace aimed at transforming the kirana ecosystem in the country.
Flipkart Wholesale will commence operations in August 2020 and will initially be involved in grocery and fashion segment. It will leverage Flipkart’s strong homegrown technology capabilities, extensive leadership in the consumer online commerce segment and an in-depth understanding of the industry in India.
Flipkart’s new B2B or wholesale online business is aimed at the largely unorganised kirana segment and will enable them to order goods directly through this platform.
It will utilise Flipkart Group’s vast supply chain infrastructure to reach kiranas and MSMEs across the country.
Plus, Flipkart Wholesale will also draw on the merchandising experience of the Walmart India team and over 12 years of operating the Best Price stores, which currently supports more than 1.5 million members.
Flipkart veteran Adarsh Menon will head the new business vertical while Sameer Aggarwal, Walmart India CEO, will stay with the new business to ensure a smooth transition, post which, he is to move to another role within Walmart.
The acquisition will help Flipkart to expand its reach and to foray in the food and grocery segment while strengthening its supply chain. Walmart India has 28 Best Price stores and two fulfilment centres to pass on to Flipkart.
Kalyan Krishnamurthy, CEO, Flipkart Group, said “With the launch of Flipkart Wholesale, we will now extend our capabilities across technology, logistics and finance to small businesses across the country. 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 previous week, Flipkart Group had maintained that it is set to receive a fund infusion of US $ 1.2 billion led by Walmart and a group of existing shareholders, for its online business. The investment values the Group at US $ 24.9 billion in post-money valuation.
Walmart had invested US $ 16 billion for a majority stake in Flipkart, in 2018. Judith McKenna, President and CEO, Walmart International, said “For over a decade, we’ve been committed to India’s prosperity by serving kiranas and MSMEs, supporting smallholder farmers and building global sourcing and technology hubs throughout the country. Today marks the next big step as Walmart India’s pioneering cash-and-carry legacy meets Flipkart’s culture of innovation in the launch of Flipkart Wholesale.”