Walmart Inc. is selling its Indian stores to Flipkart, the e-commerce startup it controls, consolidating its operations in the world’s second-most-populous country as it works to fend off Amazon.com Inc.
Flipkart said recently, it is launching a wholesale marketplace to serve small and medium-sized businesses and neighborhood stores in India, entering an increasingly crowded space that has attracted several players, including India’s largest physical retail chain (Reliance Retail), Lightspeed-backed Udaan, Amazon and Facebook in recent years.
Walmart operates 28 warehouse-club-style stores in India that are only open to members. Branded as Best Price Modern Wholesale, the stores serve independent retailers and other small businesses.
Flipkart did not disclose the financial terms of the acquisition. Current Indian laws restrict Walmart from operating super-centers or selling its own inventory directly to consumers in the country. Earlier this month, Walmart, which acquired a majority stake in Flipkart for $16 billion in 2018, led a $1.2 billion financing round in the Indian e-commerce firm to increase its majority stake of 77% to more than 82%.
According to Tech Crunch, Kalyan Krishnamurthy, chief executive of Flipkart Group, said 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. With this development, the Flipkart Group will further build upon the synergies across its businesses to drive greater value and choice for end-consumers and businesses alike.”
Flipkart Wholesale, which will be operational starting next month, will use the e-commerce giant’s existing vast supply chain infrastructure and offer an “exhaustive” range of products and merchandise, as well as easy credit options and opportunities for additional income generation to neighborhood stores (locally known as kiranas) and other small businesses, the company said, adding it will also help these businesses with insights so they can plan their inventory needs more effectively.