Flipkart Wholesale vs Reliance JioMart - The battle lines are drawn to win India's kiranas

Flipkart Group today announced the acquisition of Walmart India and the launch of Flipkart Wholesale, a whole new digital marketplace to help "transform the kirana retail ecosystem" in India.

The move will consolidate retail behemoth Walmart Inc's entire India business under the Flipkart Group. The launch of Flipkart Wholesale also comes a couple of months after Reliance Industries Ltd launched  Reliance JioMart, an online avatar of Reliance Retail, which plans to leverage its telecom outreach and ties with Facebook to tap into kirana retail ecosystem in India. Other competitors of Flipkart Wholesale are Udaan, Metro Cash & Carry and Amazon's B2B division.

Flipkart Group has acquired a 100 per cent stake in Walmart India, which operates the Best Price cash-and-carry business to strengthen capabilities and business-to-business service offering, the company said.

US-based retail major Walmart owns a majority stake in Flipkart. Flipkart Wholesale will be headed by Adarsh Menon, Flipkart veteran. Walmart India CEO Sameer Aggarwal will move to another role in Walmart after ensuring a smooth transition.

Walmart India has around 28 Best Price stores in India besides two fulfilment centres and supports around 1.5 million members.

The launch of Flipkart Wholesale will leverage talent, strong technology backbone, deep merchandising expertise and logistics infrastructure to accelerate growth and prosperity for kiranas and MSMEs, the company said. It added that kiranas and MSMEs are central to India's retail ecosystem and Flipkart Wholesale will focus on meeting their needs by providing small businesses with a wide selection at a significant value.

"With the launch of Flipkart Wholesale, we will now extend our capabilities across technology, logistics and finance to small businesses across the country. The acquisition of Walmart India adds a strong talent pool with deep expertise in the wholesale business that will strengthen our position to address the needs of kiranas and MSMEs uniquely," Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group, said.

Judith McKenna, President and Chief Executive Officer, Walmart International said it's a big step as Walmart India's cash-and-carry legacy meets Flipkart's culture of innovation. By leveraging each other's strengths and expertise, this combined team will break new ground, McKenna added.

Recently, Flipkart said it would raise $1.2 billion funding from investors led by Walmart and the company would be valued at $24.9 billion. Flipkart was valued at $21 billion in May 2018 when Walmart acquired a 77 per cent stake for $16 billion.

JioMart Strategy

Jio has already announced its grocery delivery service through WhatsApp across 200 cities of India. Customers need to add JioMart's Whatsapp number, following which they get a link from JioMart to order through chat. Fill in details and your order is placed to a local kirana store, which then fulfils the order. The company is working aggressively to on-board kirana stores and to encourage them to manage inventory by using its point of sales machines (PoS). It is also relying heavily on WhatsApp's huge user base, which could significantly accelerate JioMart adoption.

Also read: Flipkart raises $1.2 billion in funding from Walmart; e-tailer now valued at $24.9 billion