Walmart Owned Flipkart Buys Walmart India: How?

Walmart Owned Flipkart Buys Walmart India: How?

Flipkart recently acquired Walmart India Pvt. Ltd. By doing so, Walmart Inc brought Walmart’s entire India portfolio under Flipkart group, which will help Flipkart expand its business in retail as well as the B2B sector. Let’s understand how Flipkart is eyeing to compete with JioMart and Amazon and also look at its history.

Crux of the Matter

Flipkart – Walmart
Walmart India Pvt. Ltd operates the Best Price cash-and-carry wholesale stores in India. Currently, it has 28 Best Price stores which will remain operational after Flipkart’s acquisition of Walmart India Pvt. Ltd. Moreover, Best Price has more than 1.5 million customer base including Kirana stores, food services and hotel industries, and other medium and small enterprises. This deal will help Flipkart expand its business-to-business vertical to survive tough competition against Jio Mart and Amazon. Flipkart retailing will also get a boost by Walmart’s move to consolidate the retail units and Flipkart Group will also get all Walmart India employees.

We are looking at a part of that market, which is valued at $150 billion, as the online B2B business continues to grow as a critical channel. Flipkart Wholesale can leverage Walmart India’s merchandising experience, strong relationship with brands and over 12 years of experience of operating Best Price stores, most of whom are small businesses.

Adarsh Menon, Senior Vice President and Head, Flipkart Wholesale

US giant Walmart Inc acquired a 77% stake in Flipkart in 2018 for $16 billion. Earlier this month, Walmart Inc invested an additional $1.2 billion in Flipkart Group. The valuation of the company increased to $24.9 billion, about 19% higher than when Walmart acquired it.

Flipkart’s First Five Years

  • 2007 Sachin Bansal and Binny Bansal, both alumni of IIT-Delhi and former Amazon employees launched Flipkart that then delivered books across India.
  • 2008 – Flipkart opened its first office in Bangalore with 24×7 customer service and delivered over 3,400 shipments in a year.
  • 2009Accel Partners invested $1 million in Flipkart and opened offices in Delhi and Mumbai.
  • 2010 – Started Cash-on-Delivery payment mode, launched logistics arm Ekart and acquired social book recommendation portal WeRead. On top of that it received $10mn fund from Tiger Global.
  • 2011 – Launched digital wallet, raised another $20 mn from Tiger Global, and delivered products to over 600 cities in India.

Flipkart Becomes India’s Amazon

  • 2012 – Launched mobile shopping app and acquired electronics e-tailer Letsbuy.
  • 2013 – Raised $160 million in funding to expand business-to-marketplace model and opened platform to sellers and launched PayZippy, an online payments solution for merchants and customers.
  • 2014 – Became the first Indian internet retailer to register $1.9bn gross merchandise value. It acquired fashion e-tailer Myntra for ₹2000 crore. It also came up with festive shopping sale BIG BILLION DAYS, which became a hit in India.
  • 2016 – Became the first Indian mobile app to cross 50 million users and had more than 100 million registered customer base. It acquired PhonePe and Jabong.
  • 2017 – Tencent, eBay & Microsoft invested $1.4 billion. Softbank Vision Fund invested $2.5 billion in Flipkart. Flipkart acquired eBay India.
  • 2018 – Walmart invested $16 billion for an initial stake of 77% in Flipkart. Founder Sachin Bansal left Flipkart. Binny Bansal resigned amidst allegations of personal misconduct.
  • Sam’s Club is an American chain of membership-only retail warehouse clubs owned and operated by Walmart Inc. It was founded in 1983 and named after Walmart founder Sam Walton.
  • Sachin Bansal, co-founder and former chief executive of Flipkart, is the managing director of Navi Technologies. Navi Technologies has recently raised up to Rs 204 crore from mid-market private equity firm Gaja Capital.
  • The Walton family’s collective fortune makes them the richest family in the United States of America and the richest non-royal family in the world. In July 2020, the annual Sunday Times Rich List reported that the Walton family’s net worth was $225.2 billion.