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India’s renowned e-commerce outlet, Flipkart has acquired a 100% stake in Walmart to boost its Flipkart Wholesale business that will commence operation in August.
Flipkart has acquired a 100% stake in Walmart India, a move that the company hopes will help bolster its new business venture, the Flipkart Wholesale business. Walmart India Pvt Ltd is renowned to operate the best price cash and carry business in India, a reputation that will add credence to Flipkart wholesale business scheduled to begin its operations in August.
The Flipkart acquisition of Walmart India will in the bigger picture consolidate the reach of Walmart Inc (NYSE: WMT) who acquired a majority stake in Flipkart Group in a deal worth $16 billion back in 2018. Upon commencement, Flipkart Wholesale will be managed by Adarsh Menon, its veteran. As part of the deal, Sameer Aggarwal, Walmart India CEO, will remain with the company to oversee a smooth transition, after which he will take up another role with the parent company Walmart (WMT).
Positives Around Flipkart Wholesale
The launch of the Flipkart Wholesale marketplace will help serve small and medium scale businesses in and around India. The Indian market has the right population that emerging e-commerce businesses with the right business models can find the right integration. It will leverage the technological provisions of Walmart India as well as its extensive supply chain network. With the acquisition, Flipkart wholesale will be better positioned to serve India’s numerous unorganized Kiranas (also known as neighborhood stores) and MSMEs. These Kiranas will be able to place orders directly on the Flipkart Wholesale website.
Kalyan Krishnamurthy, the CEO of 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 Business to the Business marketplace in India has attracted a lot of e-commerce companies around the world including Amazon.com Inc (NASDAQ: AMZN). The Flipkart Wholesale Marketplace initiative will be able to combat the competition that abounds in the e-commerce space with a recent cash infusion of about $1.2 billion from investors led by Walmart.
Attractiveness of India’s MarketPlace
The Indian marketplace and homegrown businesses have been attracting investors from around the world. With India projected to be an economic powerhouse in the near future, coupled with the growing technological positioning of the country, several tech-based organizations have been creating means to find an entrance into the promising market.
Facebook Inc (NASDAQ: FB) in April acquired a 10% stake in Jio Platforms in a deal worth $5.7 billion. It is owned by Reliance Industries Limited who also operates JioMart. The alliance will see the two firms leverage their technology to solidify their position in the growing digital marketplace the world is evolving into.
With thousands of Kiranas already forging partnerships with Flipkart to enhance their businesses and income streams, outside investors may soon be attracted to the platform particularly when the recorded growth and performance of the business surpass those of its major competitors.