Flipkart forays into online wholesale segment; acquires Walmart India operations

Flipkarton Thursday announced the acquisition of WalmartIndia. The homegrown ecommerce major said it has acquired a 100 percent stake in Walmart India, and has launched online wholesale marketplace - Flipkart Wholesale, which will be the digital marketplace for the kirana retail ecosystem. Walmart Inc. currently owns a majority stake in Flipkart and its subsidiary, Walmart India.

The acquisition of Walmart India by Flipkart will bring under its fold the Best Price cash and carry stores, which is Walmart's offline wholesale business.

According to a statement released by the company, Flipkart Wholesale will launch its operations in August 2020, and will pilot services for the grocery and fashion categories. The company said it will be headed by Flipkart veteran Adarsh Menon.

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Sameer Aggarwal, Chief Executive Officer, Walmart India, will remain with the company to ensure a smooth transition, after which he will move to another role within Walmart.

Following the acquisition, the employees of Walmart India will join the Flipkart Group and Best Price brand will continue to operate its omni-channel network of offline and online operations.

This move will expand the reach of Flipkart to millions of small retailers or kirana stores, and the micro, small medium enterprises (MSMEs).

“Kiranas and MSMEs are central to India’s retail ecosystem, and Flipkart Wholesale will focus on meeting their needs by providing small businesses a wide selection at significant value, powered by technology to make their lives easier,” the statement said.

This also gives Flipkart the opportunity to leverage its homegrown technology capabilities to bring more of the offline traders onto the online platform.

Speaking on this development, Kalyan Krishnamurthy, Chief Executive Officer, 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.”

Flipkart’s foray into the wholesale segment comes at a very crucial time when two of its main competitors – Reliance Retail and Amazon are aggressively expanding into the India market.

The combining of Flipkart and Walmart India resources will expand the supply chain infrastructure, and draw upon each others deep experience of the market. Flipkart has got over 200 million registered consumers while Walmart India operates 28 wholesale stores and two fulfilment centres, with more than 1.5 million members.

Judith McKenna, President and Chief Executive Officer, Walmart International, said,

“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. 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.”

Adarsh Menon, Senior Vice President and Head, Flipkart Wholesale, said,

“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 focussed on transforming the wholesale experience for kiranas and MSMEs.”