Flipkart said today that it has procured parent Walmart Inc’s local cash and carry business. This is an e-commerce giant step to increase there footprints in wholesale offerings and give a tough competition to Amazon.com Inc.
Without disclosing any amount of the deal Flipkart said that they would be launching the digital marketplace going to be known as Flipkart Wholesale. From the year 2009 Walmart has been successfully running the Best Price wholesale cash and carry stores in India.
“The Flipkart Group, India’s homegrown e-commerce group, today announced the launch of Flipkart Wholesale, a new digital marketplace that will help transform the Kirana retail ecosystem in India by leveraging cutting-edge and locally developed technology. As part of this launch, the Group also announced the acquisition of 100% interest in Wal-Mart India Private Limited, which operates the Best Price cash-and-carry business, to leverage the strong wholesale capabilities of the company and enable growth and prosperity for Kiranas and MSMEs,” Flipkart said in a blog post.
Walmart has around 28 wholesale stores, two fulfillment centers, and members exceeding 1.5 million mostly containing mom and pop stores. They but till now have not been able to make any money from this work.
This deal comes at a time when Amazon is trying to run after India’s mom and pop stores which are known as one of the pillars of the Indian economy.
Flipkart also faces competition from JioMart a local online grocery delivery venture of Reliance. But JioMart has an edge over its competitors as India does not permit foreign investors controlling and marketing their own catalog.
With this deal, the Walmart India workforce would also be joining Flipkart.
Judith McKenna, President, and Chief Executive Officer, Walmart International, confirmed, “Flipkart Wholesale will launch its operations in August 2020 and will pilot services for the grocery and fashion categories. It will be headed by Adarsh Menon, a veteran at Flipkart. Sameer Aggarwal, Chief Executive Officer at Walmart India, will remain with the company to ensure a smooth transition, after which time he will move to another role within Walmart.”