Walmart was impressed by this particular wing of the Flipkart group. Check this out.

Flipkart India Private Limited, a Flipkart subsidiary that runs the wholesale business, contributes the largest source of revenue for the entire group. Walmart seems to have enjoyed this part of the statistical game.

Walmart, which valued Flipkart at $21 billion, clearly saw the latter’s wholesale business as an operational jewel. During the days when it was assessing the deal, it would have realised that Flipkart’s group revenue mainly came from its wholesale business, a segment that Walmart itself is adept with in the India market. Walmart has 21 "cash-and-carry" wholesale stores in India that sell to businesses.

Yes, a back of the envelope calculation shows that Flipkart India Private Limited, a Flipkart subsidiary that runs the wholesale business, contributes the largest source of revenue for the Flipkart group. The wholesale business arm of Flipkart has also proved to be more efficient than other associate companies, and burns much less cash, compared with other arms of Flipkart, like its marketplace or Myntra.

Questions mailed to Flipkart were not answered.

A data check on the company’s financial statements revealed some interesting details. While the holding company of Flipkart Group - Flipkart Limited, Singapore - showed total revenue of Rs 20,454 crore for the year ended March 2017, Flipkart’s marketplace (run by Flipkart Internet Private Limited) generated only 9.2 percent of this.

The wholesale arm on the other hand (that is being operated by Flipkart India Private Limited) contributed a whopping 74.6 percent of the entire Flipkart Group's revenue. Myntra Designs contributed another 9.7 percent. The rest were contributed by other companies like Instakart, PhonePe, etc.

The table shows the Flipkart’s wholesale business incurred a loss of just Rs 244 crore on a revenue of Rs 15,264 crore, while the marketplace business unit incurred a loss of Rs 1,639 crore on a revenue of Rs 1,882 crore. It is clear that the marketplace model is a difficult business to crack.

Even as far as employee benefit expenses were concerned, the marketplace (Flipkart Internet) takes the major share of it. While Myntra Designs and Flipkart India saw their employee benefit expenses at Rs 267.5 crore and Rs 166.6 crore, respectively, Flipkart Internet (marketplace) saw its employee benefit expenses at Rs 1,032 crore.

Flipkart internet derives its income from four streams: marketplace services, payment collection services, logistics services and other incomes.

The marketplace services is the revenue from operating an internet portal, which deals with the online sale of goods by registered merchants in the form of commission on transactions. The payment collection services revenue is based upon a fixed percentage applied to the transaction value and is recognised on successful completion of services. Income from logistics services is obviously the charges applicable for shipments. And other operating revenue is based on the terms of the contract with the customers towards providing spaces for advertisement on its website.

While PhonePe might have crossed 100 million user mark recently, in FY17 the company didn’t play a significant role. The digital payments platform posted a revenue of Rs 3.03 crore for the financial year 2016-17, compared with Rs 19 lakh in the previous financial year, as per the company’s filings with the Registrar of Companies.

An analyst who preferred to be anonymous said Flipkart group is very complicated in its structure. He said, “It’s very difficult to allocate sales to different business units and there are some imponderables. For example, WS Retail is a closely related entity of Flipkart and is one of the largest sellers in Flipkart. But the Bansals had sold their stake in the company many years ago to former OnMobile Global chief operating officer Rajeev Kuchhal and other investors.”

He added, “As the group is structured in a complex way, what might be revenue for a company, might be cost for another associate company, thereby posing a challenge to rightfully allocate revenue streams to different units. But on the face of it, yes, the wholesale business unit is the largest contributor”.