Sources said the Flipkart group, which operates Flipkart and Myntra, is looking at a reverse acquisition of the B2B segment of Walmart and it will function as a subsidiary of the group. Flipkart is expanding its footprint in the online food and grocery segment and the acquisition of the B2B business provides strength to the supply chain.
A questionnaire emailed to a Flipkart Group spokesperson did not elicit a response. The Bengaluru-headquartered company, in which Walmart acquired a 77% stake for around $16 billion, is piloting an online B2B business in North India, similar to Amazon Business and recently launched Jio Mart by Mukesh Ambani-led Reliance Industries.
Flipkart’s B2B online business will also cater to the vastly unorganised kirana segment and these small shops will be able to order goods directly through this platform. Walmart India, which currently operates 28 Best Price wholesale stores across India, will be able to fulfil these orders, people aware of the development said. Flipkart is likely to share Walmart’s warehouses.
Both Walmart and Flipkart recently made a strategic investment in Ninjacart, a startup which will help amplify the companies’ sourcing from farmers. In addition, Flipkart has invested in Shadowfax, a B2B lastmile delivery platform that is likely to help it scale up its hyperlocal abilities to cater to kirana stores.
The sources said the plan will be compliant with all regulatory requirements as it will only serve as a subsidiary of the broader group. Walmart India recently laid off over 50 executives, with its outgoing president & CEO Krish Iyer saying the consolidation in staffing was done to focus on its omni-channel initiatives.
“If the move goes through, it will create an efficient and asset-light model that can build on the synergy between all these organisations,” said a source. “This looks like a sure shot success story as Flipkart will be able to tap all segments of e-commerce and not only the urban market.”