After being unable to find a buyer for its wholesale business, Walmart has apparantly turned to its own acquired e-commerce platform, Flipkart. According to an ET report citing sources, Flipkart is likely to acquire a stake in cash and carry Business of its parent company Walmart. This move came after Tata group’s negotiations with the loss-making Wholesale business of Walmart was heading nowhere.
Flipkart has been trying to expand its reach in online food and grocery segment and this acquisition of Walmart’s B2B business could help in serving that purpose, by meeting demand of unorganized segments of India. Flipkart is looking for reverse acquisition of the B2B segment that will function as its subsidiary in the B2B business. The plan would be put into motion once it is compliant with all regulatory requirements.
Walmart India currently operates 28 best price wholesale stores across India. Through these stores, Flipkart is focusing to supply goods to vastly unorganized Kirana segment and small shops of India. This online B2B business will cater goods directly to these suppliers more efficiently by possibly sharing Walmart Warehouses.
Flipkart earlier took steps to ensure the success of this online food delivery model which includes strategic investment in Ninjacart by Walmart and Flipkart. Ninjacart is a supply chain startup that can amplify the companies sourcing of fresh food directly from farmers. It also took steps to improve the delivery capabilities to hyperlocal Kirana stores by investing in Shadowfox, a B2B last-mile logistics network that offers tech-enabled delivery for e-commerce, restaurants, FMCG, pharma and online & offline retailers.
Walmart India made consolidation in staffing in the start of January by laying off over 50 executives to focus on its omnichannel initiatives as told by Krish Iyer, president and CEO of Walmart India. Walmart is not performing well in India which it claimed is the result of making more investments for growth. The company’s wholesale unit made a revenue of Rs 4,065 crore but the real picture is depicted by losses that mount to 171.68 crores as compared to last year.