After world’s largest retailer Walmart picked up a 77% stake in India’s e-commerce major Flipkart, CEO Kalyan Krishnamurthy said that Flipkart will roll out groceries in four to five cities by end of the year.
After world’s largest retailer Walmart picked up a 77% stake in India’s e-commerce major Flipkart, CEO Kalyan Krishnamurthy said that Flipkart will roll out groceries in four to five cities by end of the year. “E-commerce in India is a complex problem, we are yet to solve that. Flipkart will roll out groceries in 4-5 cities by the end of the year,” ET Now reported CEO Kalyan Krishnamurthy as saying. Notably, Kalyan Krishnamurthy will carry on as Flipkart’s CEO, while Binny Bansal will now become Flipkart Group CEO, even as co-founder Binny Bansal steps down.
Interestingly, Kalyan Krishnamurthy became the CEO of Flipkart in January 2017. When the startup’s valuation was dropping and rival Amazon.com had pledged $5 billion-plus, intensifying competition in the market. Krishnamurthy said that he will look to learn from Walmart on building private band portfolio.
“This deal with Walmart can provide Flipkart the expertise of running offline stores, access to sellers and manufacturers, supply chain and the know-how to get into the grocery segment,’’ Satish Meena, a New Delhi-based senior forecast analyst at Forrester Research told Bloomberg. Krish Iyer of Walmart India also said that the giant retailer in on track to open about 50 stores in the next 5 years. Further, he said that traditional retail continues to offer tremendous opportunity for Walmart.
According to CRISIL, the deal indicates the attractiveness of India’s consumption market for global majors. “With Walmart acquiring stake in Flipkart, we expect enhanced thrust on the online grocery segment. We expect online grocery to be the fastest growing segment in the e-retail space, growing at a 65-70% CAGR to touch Rs 100 billion in revenues by fiscal 2020,” Ajay Srinivasan, Director, CRISIL Research said in a note.
Walmart said that post-acquisition, both the partners will leverage their strengths, but will maintain their distinct brands and operating structures. Walmart India Chief Executive Krish Iyer said, “We operate 21 best price cash-and-carry stores and one fulfillment centre in 19 cities across nine states, with 95 percent of sourcing from the country, aiding suppliers, creating skilled jobs and contributing to local economies.”