Flipkart buys the Indian wholesaler of parent Walmart

BENGALURU (Reuters) – Flipkart said on Thursday it had acquired local cash merchant Walmart Inc, as the e-commerce company strengthens its wholesale offering to better compete with Inc.

The deal will enable Flipkart to launch a digital marketplace called Flipkart Wholesale next month, the Bengaluru-based company said, without disclosing any financial details of the deal.

Walmart, which has operated 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, most of which include mom-and-pop stores, but Walmart hasn’t been able to monetize the business.

The Flipkart deal, as reported by local daily Economic Times, was close in January follows , as e-commerce players including Amazon look to woo Indian stores, which are considered the backbone of the economy.

Flipkart also faces competition from local grocery start-up 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 sell their own inventory on its e-commerce platforms, which is seen as giving JioMart and other local players an advantage in the key emerging e-commerce market.

Flipkart said that as part of the deal, Walmart India employees will join the Flipkart Group.

(Reporting by Sachin Ravikumar; Editing by Krishna Chandra Eluri and Rashmi Aich)