Walmart set-up first Best Price store in India in 2009 while Supermart, Flipkart's grocery business, was launched in May last year and competes primarily with Amazon Pantry, Grofers, and BigBasket.
Walmart, which runs 27 Best Price modern wholesale stores in India and its e-commerce arm Flipkart, which operates online grocery vertical Supermart, is looking to add strength to respective businesses as the two announced on Wednesday joint strategic funding in Tiger Global and Nandan Nilekani-backed business-to-business fresh produce supply chain startup Ninjacart. The investment will give Ninjacart access to more customers, new cities, along with Walmart’s global best practice to boost the local fresh produce market. The investment is likely to close by the end of December.
Walmart set-up first Best Price store in India in 2009. The stores are a membership-based cash-and-carry business that offers more than 5,000 items at wholesale prices to kiranas and small business owners. Supermart, on the other hand, was launched in August last year and competes primarily with Amazon Pantry, Grofers, and BigBasket. In last one year at Supermart “We have focused on creating the right infrastructure, supporting local farmers, producers and food processors, and building sustainability into the ecosystem, all while creating thousands of new jobs,” said Kalyan Krishnamurthy, CEO, Flipkart Group adding that Ninjacart has similar values and commitment “to tech-driven innovation that improves life in India.”
Investment in Ninjcart is part of Walmart India’s focus on food as among the key business segments. Flipkart had announced setting up a food retail business called Farmermart in October this year. “We’re looking forward to invest more deeply in local agri ecosystem, supply chain and working with lakhs of small farmers, Farmer Producers Organisations (FPOs), food processing industry in India, helping multiply farmers’ income and bring affordable, quality food for millions of customers across the country,” Krishnamurthy had said in a statement.
Ninjcart investment will help in procurement by Walmart’s Best Price stores that are targeting 25 per cent produce directly from farmers by 2023. “Our new partnership with Ninjacart will help us create more opportunities for smallholder farmers and boost rural incomes while also improving access to high-quality produce for all our members including kiranas, hotels, restaurants and businesses around India,” said Krish Iyer, President and CEO, Walmart India.
The food retail market in India is likely to grow from $487 billion in 2017 to over $827 billion in 2023 growing at a CAGR of 9.23 per cent, according to TechSci Research. Even though online grocery market is still at a nascent stage with only around 0.2 per cent — around $1.2 billion of $500 billion grocery market, according to RedSeer, the market is likely to grow at 60 per cent CAGR to $8.7 billion by 2022. Ninjacart, founded in 2015, currently has a network of over 200 collection centres and 1,200 warehouses across India. The company claimed to ‘move’ more than 1,400 tons of fresh produce per day. Along with Ninjcart, startups such as WayCool, Crofarm, Jumbotail etc are some of the B2B farm produce marketplaces.