Ecommerce firm Flipkart Group said on Thursday that it has acquired Walmart India, and launched a business-to-business (B2B) marketplace called Flipkart Wholesale.
The Bengaluru-based company will leverage the wholesale capabilities of Walmart India, which operates a cash-and-carry business called Best Price, a statement said.
Post acquisition, the Best Price brand will continue to operate via its omnichannel network of 28 stores and ecommerce operations. Best Price claims to have a customer base of over 1.5 million members, including kiranas, hotel, restaurant and catering (HORECA) businesses, as well as micro, small and medium enterprises (MSMEs).
Bentoville, Arkansas-based Walmart, the world’s largest brick-and-mortar retailer, became the majority owner in Flipkart in May 2018 when it acquired a 77% stake in the company for $16 billion. The reverse acquisition of its Indian subsidiary comes a week after Flipkart Group raised $1.2 billion in a fresh equity funding round led by Walmart. The deal valued the homegrown etailer at $24.9 billion, post money.
Additionally, Walmart India CEO Sameer Aggarwal will move to another role within the company after the transition, according to the statement, while its employees will join the Flipkart Group.
“Flipkart Wholesale will draw on the merchandising experience of the Walmart India team, its strong relationships with brands, deep DNA of servicing kiranas and 12+ years of operating Best Price stores,” the statement said.
The digital wholesale marketplace, which is set to begin operations from August, will be headed by senior vice president Adarsh Menon, who in his most recent role, was responsible for Flipkart’s private bands, electronics and furniture verticals.
“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,” Kalyan Krishnamurthy, CEO of Flipkart Group, said.
Flipkart Wholesale will offer products ranging from grocery, general merchandise and fashion to small businesses, opening a new warfront with Amazon’s B2B marketplace Amazon Business; Udaan, which was founded by former Flipkart employees; Metro Cash & Carry; and Reliance Market; along with venture capital-backed startups such as Bijnis, Jumbotail and Ninjacart. In fact, Walmart and Flipkart made a joint investment in Ninjacart in December last year.
The homegrown ecommerce giant said it will use its technology capabilities, supply chain infrastructure and logistics network to offer operational efficiencies and better margins. It will also offer easy credit options to MSMEs and kiranas, it added.
“For over a decade, we’ve been committed to India’s prosperity by serving kiranas and MSMEs, supporting smallholder farmers and building global sourcing and technology hubs throughout the country. 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,” Judith McKenna, president and CEO of Walmart International, said.
Founded in 2007 by Sachin Bansal and Binny Bansal, both of whom have exited the company, the Flipkart Group currently operates its flagship ecommerce marketplace Flipkart, digital payments platform PhonePe, fashion site Myntra, logistics and delivery services provider eKart, and Flipkart Wholesale, which now includes the Best Price brand.