On Thursday, Flipkart announced the acquisition of Walmart India for an undisclosed amount. It also announced that it will launch ‘Flipkart Wholesale’ in the next month. Flipkart Wholesale will be the homegrown e-commerce major looking to tap into the USD 650 billion B2B retail markets in India.
28 Best Price wholesale stores are being run by Walmart India in the country.
In the previous week, Flipkart had announced that it had raised USD 1.2 billion in funding from an investor group led by Walmart. USD 16 billion was invested by Walmart Inc for acquiring a 77% stake in the group.
Flipkart Wholesale is a new digital marketplace that will focus on addressing the B2B segment in India.
Adarsh Menon, Flipkart Senior Vice President, and Head-Flipkart Wholesale said that this marketplace will effectively link manufacturers and sellers on one end and micro, small and medium enterprises (MSMEs) and kiranas on the other end.
He said the acquisition will help the strengthening of capabilities to address the requirements of MSMEs and kiranas.
This move will intensify the competition between Flipkart and Amazon since the latter already has a B2B segment.
Menon said that the B2B market for finished goods is estimated to be around USD 650 billion. Initially, they will be focusing on USD 140 billion out of the USD 650 billion. The USD 140 billion is mainly the categories of grocery, fashion, large and small electronics, and general merchandise.
The world’s biggest retailer, Walmart, had entered the Indian market through a partnership for cash-and-carry business with Bharti Enterprises. They allowed small businesses, hotels, and Kirana stores to buy in bulk.
The two c0ompanies went separate ways in 2013. The cash-and-carry business was continued by Walmart in India on its own.
The operations of Flipkart Wholesale will be launched in August, it will be headed by Menon.
The Chief Executive Officer at Walmart India, Sameer Aggarwal, will continue working to ensure a smooth transition. After this, he will move to a different role in Walmart.
The companies said in a statement that the employees of Walmart India business will be joining the Flipkart group. The teams of the home office will be integrating over the next year.
Walmart India is estimated to have 3,500 employees. It was a wholly-owned subsidiary of Walmart Inc.
The 1.5 million members of the Best Price cash-and-carry business will continue to be served by the omnichannel network of 28 stores in nine states. A new cash-and-carry store of Walmart India is coming up in Tirupati in the next few months.
Walmart India CEO, Sameer Aggarwal said that a thing they saw during the coronavirus outbreak was that kiranas are shopping in more omnichannel ways than before.
He also said that the kiranas will remain big and the organized B2B will be accountable for a bigger part of retail.
The access to easy credit options opportunities will also benefit the Kiranas and MSMEs. Sameer also said that the kiranas and MSMEs will benefit through the various initiatives of Flipkart which will create new ways to catalyze growth.
A separate technology unit in the country is being continued by Walmart Inc under the name of Walmart Labs India.