A few weeks ago, Walmart sacked more than 50 employees in India and halted its expansion plans. The development was said to be a part of a restructuring of its loss-making Walmart India business that operates around 28 Best Price stores.
Now, according to a new report from ET that cites people aware of the development, Walmart is all set to convert some of its wholesale stores into fulfilment centres for its owned online marketplace Flipkart.
A person was cited in the report claiming that six Best Price stores in India will be converted into fulfilment centres for Flipkart. Another person added that Walmart could turn many more cash-and-carry stores into warehouses in the coming months.
Earlier, it was reported that Flipkart could acquire a stake in cash and carry business of its parent company Walmart as the negotiations for selling the loss-making wholesale business were heading nowhere.
It’s pretty clear that Walmart India is not performing well and is in-fact struggling to keep the business running. The company has claimed this is because of making more investments for growth. Best Price stores had accumulated losses of ₹2,180.80 crore till March 2019 while in the previous fiscal year, Walmart India posted sales of ₹4,095 crore on a net loss of ₹171.6 crore.
Walmart entered India in 2009 with its first wholesale store in Punjab, under a 50:50 joint venture with Bharti Enterprises. However, in 2013, the company decided to go solo with its wholesale business. While India permits 100 percent overseas investment in this sector, it is limited to B2B sales only and not B2C.