Flipkart Group has bought the wholesale business of Walmart in India and has now started its own business under the name of Flipkart Wholesale. The company has bought a 100 percent stake in Walmart India.
Significantly, the major stake in Flipkart (77 percent) is the Walmart Group of America. As such, it is said that instead of keeping its wholesale business separate, Walmart has associated it with Flipkart.
Walmart India runs a cash and carry wholesale business called ‘Best Price’ in India. Flipkart wants to strengthen its business to business service with this purchase and is also preparing for a change in retail grocery where Reliance Geomart has emerged as a major challenge.
Flipkart’s senior executive Adarsh Menon has been made the head of Flipkart Wholesale, while Samir Aggarwal, CEO of Walmart India, will be hired elsewhere.
Walmart India has 28 Best Price Stores across the country and has about 1.5 million business associates. The company said in a statement, “The launch of Flipkart Wholesale will help in better utilization of talent, strong technology base, expertise in commodity trading and logistic framework and will give a boost to grocery and MSMEs.”
“This is a big step forward as Walmart India’s cash and carry legacy and Flipkart’s culture of innovation are getting mixed up,” said Judith McKenna, president and chief executive officer of Walmart International. By using each other’s strengths and strengths, this combined team will gain new status.
Recently Flipkart announced that it will raise $ 1.2 billion from Walmart-led investors. Now the valuation of the company has been around $ 24.9 billion. In May 2018, Walmart bought a 77 percent stake in Flipkart for $ 16 billion. At that time Flipkart was valued at $ 21 billion. The company recently bought Arvind Youth Brands, a subsidiary of Arvind Fashion Limited, for Rs 260 crore.
During this era when corona outbreak has caused recesion in the market, it will be interesting to see that whether this deal be fruitful for the company or not.