Walmart Inc. (WMT) owned and India based online retailer Flipkart has announced having purchased Indian wholesale business owned by its mother company. Flipkart said the deal will give it increased synergies to compete with giant e-commerce giant Amazon Inc. (AMZN).
This deal will strengthen wholesale offerings of Flipkart further allowing it to launch a digital market platform going by the name ‘Flipkart Wholesale’ set to be launched next month.
Flipkart failed to disclose the financial details of the deal. However, the wholesale business comprises of 2 fulfillment centers, 28 wholesale stores and it has 1.5 million members. A majority of the stores are mom and pop stores.
Walmart acquired a maojority stake in Flipkart two years ago in a deal worth $16 billion. For close than a decade now, Flipkart has been operating cash and carry stores in India.
India’s regulations do not allow foreigners to market and control their own inventory on their e-commerce platforms. This regulation gives domestic online retailers in India a upper hand over their foreign competitors when it comes to e-commerce.
Following closure of the deal, Flipkart says Walmart India employees will join the Flipkart group.