Flipkart buys parent Walmart's Indian wholesale business
The financial details of the deal were not disclosed
India's Flipkart said on Thursday it had acquired parent Walmart Inc's local cash-and-carry business, as the e-commerce firm strengthens its wholesale offerings to compete better with Amazon.com Inc .
The deal will allow Flipkart to launch a digital marketplace called Flipkart Wholesale next month, the Bengaluru-headquartered firm said, without disclosing any financial details of the deal.
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Walmart, which has been running Best Price wholesale cash-and-carry stores in India since 2009, bought a controlling stake in Flipkart in 2018 for $16 billion.
The brand has 28 wholesale stores, two fulfillment centers and more than 1.5 million members, largely comprising mom-and-pop stores, but Walmart has not been able to make money from this business.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| WMT | WALMART INC. | 60.22 | +0.36 | +0.60% |
The Flipkart deal, which local daily Economic Times had said was in the offing in January, comes as e-commerce players including Amazon look to woo India's mom-and-pop stores that are considered the backbone of the economy.
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Flipkart also faces competition from local online grocery upstart JioMart, backed by billionaire Mukesh Ambani-led Reliance Industries, whose digital arm has raised around $20 billion.
India does not allow foreign investors to control and market their own inventory on their e-commerce platforms, which is seen as giving JioMart and other local players an edge in a key growth market for e-commerce.
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Walmart India employees will join the Flipkart Group as part of the deal, Flipkart said.
(Reporting by Sachin Ravikumar; Editing by Krishna Chandra Eluri and Rashmi Aich)