Flipkart also acquired the wholesale business of its parent company Walmart in India. It announced acquiring 100 per cent interest in Walmart India that owns and operates 28 Best Price cash and carry wholesale stores offering close to 5,000 items.
Flipkart seems to be pulling up its socks against the soon-to-be dominant force in e-commerce – JioMart. Central to the massive opportunity in the fast-growing e-commerce space are MSMEs and kirana stores that are increasingly being wooed by every small and large marketplace. Strengthening its connect with small sellers and kiranas, Flipkart Group on Thursday launched an exclusive B2B marketplace – Flipkart Wholesale – to enable them to procure goods in categories including grocery, general merchandise, or fashion along with offering schemes and incentives. Along with the launch, the company, which currently leads the online retail market along with Amazon, has also acquired wholesale business of its parent company Walmart in India. Flipkart said it has acquired “100 per cent interest in Wal-Mart India Private Limited, which operates the Best Price cash-and-carry business” This would allow Flipkart to benefit from Walmart’s wholesale capabilities.
Walmart currently owns and operates 28 Best Price cash and carry wholesale stores that offer close to 5,000 items. Walmart also has two fulfillment centres based in Lucknow and Hyderabad.
“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,” said Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group.
The B2B marketplace will be launched in August 2020 with pilot services for the grocery and fashion categories. The business will be headed by Flipkart’s senior VP. Walmart India’s CEO Sameer Aggarwal will ensure “a smooth transition, after which time he will move to another role within Walmart,” Flipkart said in a statement.
Kiranas and MSMEs will have credit options and “opportunities for new income generation through various Flipkart initiatives,” Flipkart added. The new marketplace with leverage Flipkart’s existing technology capabilities, supply chain infrastructure to access and benefit kiranas and MSMEs. On the other hand, Walmart’s more than 12 years of experience in merchandising, relationships with brands and servicing over 1.5 million members, including kiranas, horecas, and other MSMEs will also come handy for Flipkart’s B2B marketplace to take off smoothly.
“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 combined team will break new ground in their shared mission to help Indian businesses grow and succeed,” said Judith McKenna, President and Chief Executive Officer, Walmart International. Walmart India’s employees will join the Flipkart Group and the home office teams will merge over the next year. The 28 stores and e-commerce operations under the Best Price brand will continue to operate.
The mega move by Flipkart came weeks after Mukesh Ambani’s Jio Platforms partnership with WhatsApp and massive fundraising from top investors globally including Facebook and Google to create “growth opportunities for millions of Indian small merchants and kirana shops,” Ambani had said in his speech at Reliance’s 43rd AGM recently. Reliance had already piloted the grocery service of JioMart in 200 cities through the online website and had recently launched the Android and iOS apps as well.
“Within a few weeks of launch, we have reached over 250,000 orders a day and the numbers continue to grow each day,” Ambani had said. JioMart, to take on Amazon and Flipkart, will expand from grocery segment to other categories including electronics, fashion, pharmaceutical, and healthcare in the coming days before further expanding to more cities and categories in the next few years.