Flipkart, one of India’s leading e-commerce companies, has announced its acquisition of Walmart Inc’s local cash-and-carry business. This move is aimed at strengthening Flipkart’s wholesale offerings and enhancing its competition with Amazon.com Inc.

With the acquisition, Flipkart plans to launch a digital marketplace called Flipkart Wholesale next month. However, the financial details of the deal have not been disclosed. It is worth noting that Walmart purchased a controlling stake in Flipkart back in 2018 for $16 billion.

Walmart has been operating Best Price wholesale cash-and-carry stores in India since 2009. Despite having 28 wholesale stores, two fulfillment centers, and over 1.5 million members, primarily consisting of small mom-and-pop stores, Walmart has struggled to generate profits from this business.

The acquisition of Walmart’s Indian wholesale business by Flipkart comes at a time when e-commerce players, including Amazon, are competing for the attention of India’s mom-and-pop stores, which are considered vital to the country’s economy. Additionally, Flipkart faces competition from JioMart, a local online grocery startup backed by Reliance Industries, led by billionaire Mukesh Ambani. Reliance’s digital arm has managed to secure approximately $20 billion.

It is important to note that India prohibits foreign investors from controlling and marketing their own inventory on e-commerce platforms. This restriction is seen as an advantage for JioMart and other local players, as it gives them an edge in a crucial growth market for e-commerce.

As part of the acquisition, employees of Walmart India will join the Flipkart Group, as stated in Flipkart’s announcement.

Overall, Flipkart’s acquisition of Walmart’s Indian wholesale business allows the e-commerce company to expand its wholesale offerings and establish a new digital marketplace. This strategic move enables Flipkart to compete more effectively with Amazon and other local players in India’s dynamic e-commerce market.

Links:
1. Bloomberg: Walmart to Help Flipkart Launch Wholesale Website in India
2. Moneycontrol: Flipkart to Launch Wholesale Marketplace Next Month, Strengthening e-commerce Strategy