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  • Walmart India, Flipkart top executives meet CCI

    Walmart India, Flipkart top executives meet CCI

    Top executives of Walmart India and Flipkart on Wednesday met fair trade regulator CCI to explain their activities in the country, days after submitting an application seeking approval for their $16-billion mega merger deal.

    While there was no official word on the meeting, sources said it was a “courtesy call” by the executives of the two companies during which they also apprised the regulatory authority of Walmart’s global sourcing from India, including from the farmers, and its work towards kirana stores and supplier development programmes.

    Those present in the meeting included Walmart India president and CEO Krish Iyer and the company’s senior vice president and chief corporate affairs officer Rajneesh Kumar, besides Flipkart CEO Kalyan Krishnamurthy and its group legal head R Baweja, sources said.

    In their meeting with CCI member Sudhir Mittal, the officials of the two companies briefly explained about their individual businesses, development programmes and other activities.

    The meeting comes days after Walmart approached the Competition Commission of India (CCI) for approval of its proposed acquisition of a majority stake in e-commerce major Flipkart. In their application filed last week, the two companies have said the acquisition, proposed through Walmart International Holdings, deal doesn’t raise any competition concerns.

    Mergers and acquisitions beyond a certain threshold require the approval of the CCI.

    In their plea, Walmart has told the regulator that Flipkart is a Singapore-based investment holding firm, which along with its direct and indirect subsidiaries, both in India and elsewhere, is primarily engaged in the business of wholesale cash and carry of goods and providing marketplace based e-commerce platforms to facilitate trade between customers and sellers in India.

    According to the notice submitted to the CCI by Wal-Mart International Holdings, the proposed transaction will be effected pursuant to the share purchase agreement and the share issuance and acquisition agreement entered into on May 9 by and among Walmart’s subsidiary and Flipkart.

    Retailers have joined hands to approach CCI against $16 billion Walmart-Flipkart deal as they apprehend that it would lead to massive job loss and be a “nightmare for retail trade” of the country.

    Earlier this week, traders body CAIT also said it will approach the CCI to file objections on the proposed Walmart-Flipkart deal, claiming that the agreement would lead to an uneven playing field and massive job losses.

    On the other hand, an online sellers industry body has already moved the CCI against Flipkart India Pvt Ltd, a wholesale company, for allegedly abusing its dominant position on Flipkart’s online marketplace.

    Walmart seeks to acquire 77 percent stake in the homegrown e-commerce firm with a buyout of $16 billion.

    Opposing the deal, the Confederation of All India Traders (CAIT) has also written to Commerce Minister Suresh Prabhu, seeking to know the steps being taken by the government to scrutinise the deal.

    CAIT alleged that the deal involves important issues related to FDI policy, cyber security, apprehension of using e-commerce for entering retail trade by circumventing the law etc.

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  • Walmart closes in on $15bn Flipkart e-commerce deal

    Walmart closes in on $15bn Flipkart e-commerce deal

    Walmart may have secured a key victory over Amazon in India, with reports surfacing that the board of Flipkart Online services, one of the fast-growing nation’s largest retail platforms, has approved a deal to sell 75 per cent of the company to the grocery giant for around US$15 billion.

    Citing sources familiar with the deal Bloomberg has reported that the world’s largest retailer is closing in on an official offer for the Indian retailer after Amazon, which was also reportedly looking at the business, took itself out of the race.

    The deal is expected to close in the next 10 days, although final terms remain uncertain. A Walmart deal is thought to be more appealing to regulators given Amazon’s position as the number two competitor in the market.

    Should a transaction progress it would represent a significant international capital reallocation for US-based Walmart, which only last week agreed to offload most of its stake in UK supermarket chain Asda in a £10 billion merger with Sainsbury’s.

    For Amazon, which has been investing heavily in its own Indian platform in recent years in a bid to cash in on growing consumption in the world’s second fastest growing economy, the deal represents a renewed competitive threat.

    Flipkart is an online marketplace founded in 2007 by former Amazon employees Sachin Bansal and Binny Bansal, valued at around $20 billion after garnering investment from the likes of Ebay, Microsoft and Tencent.

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  • Flipkart’s Singapore parent infuses Rs. 4500cr into India wholesale arm

    Flipkart’s Singapore parent infuses Rs. 4500cr into India wholesale arm

    the wholesale arm of the country’s largest e-commerce company, has received almost Rs 4,500 crore in what is one of the largest capital infusions for the entity, as per latest regulatory filing at the Registrar of Companies (RoC). This large investment in to the wholesale arm from its parent indicates the aggressive plans that Flipkart has charted out to counter its closest rival Amazon which too runs a wholesale arm. Since raising $4 billion from marquee investors like SoftBank last year, Flipkart has been largely been pushing its logistics and payments businesses adding big bucks to rev up these verticals.

    Flipkart India is one of the core companies that controls the e-tailer’s India operations. The wholesale arm buys products in bulk from various manufacturers and then sells it to merchants who work closely with the online retailer as well as to independent third party vendors. These merchants, in turn, sell these products to consumers on the Flipkart platform. Flipkart Internet is the other significant entity which runs the marketplace for the e-commerce major. This entity too received an investment of about Rs 370 crore recently.

    In March 2016, the Indian government allowed 100% FDI in online retail of goods and services under the marketplace model with riders which restrict a seller from contributing more than 25% of overall sales generated on any e-commerce site. This is why companies like Flipkart and Amazon, which cannot work on the inventory model, prop up few big merchants and help them cater to the growing consumer demand. Having a wholesale arm helps in doing that as they e-tailers cannot directly sell to shoppers. As per the RoC documents, Flipkart’s Singapore parent was issued each share of Flipkart India for Rs 23,900 for raising the new capital.
    An email sent to a Flipkart spokesperson on the development did not elicit a response. The e-tailer’s wholesale entity reported revenues of Rs 15,264 crore for the financial year 2017 compared to Rs12, 818 crore in the previous year showing a growth of about 18%. After a tough 2015- 2016, Flipkart had managed to make a turnaround last year with a bump up in growth numbers on the back of smartphone sale. It also successfully raised massive funds to fight Amazon as Japan’s SoftBank came on board as its largest investor.
    Both Amazon and Flipkart are vying for the largest pie of the Indian e-commerce market and are investing in their businesses at a staggering pace. Amazon has already infused over $3 billion in the Indian market and its international losses–majority of which is credited to India–stood at $3 billion for the full year of 2017. Flipkart Singapore parent reported a 67% jump in losses at Rs 8,771 crore for the financial year ending March 2017. Both the players are also ramping up their infrastructure for new businesses as they look to drive up growth. While Flipkart is setting up new fulfilment centres for its TV and large appliances business, Amazon recently announced it has opened up 15 new warehouses or what it cals Fulfillment Centres to push its grocery and daily consumables business.
    Flipkart is currently engaged in talks with Walmart, the world’s largest offline retailer, for a deal that may give the American retailer a big stake in the homegrown comoany valuing it at upwards of $20 billion, as TOI reported in our February 8 edition.
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  • SoftBank invests $2.5b in Flipkart to stop Amazon

    SoftBank invests $2.5b in Flipkart to stop Amazon

    SoftBank has just announced its biggest investment in India: a whopping US$2.5 billion in Indian ecommerce company Flipkart.

    With this latest funding round, Flipkart boasts of over US$4 billion in cash on its balance sheet and SoftBank has become its largest shareholder.
    It’s the biggest ever private investment in an Indian technology company. “This is a monumental deal for Flipkart and India,” said Binny Bansal and Sachin Bansal, co-founders of Flipkart in an announcement made today.

    Neither SoftBank nor Flipkart disclosed the exact amount of funding which came from SoftBank Vision Fund, but sources said it is a little over US$2.5 billion.
    Last week, Tech in Asia reported that SoftBank was in talks with Flipkart for an investment after rival company Snapdeal, whose biggest investor is SoftBank, walked out of a distress sale to Flipkart. The deal was being negotiated for months.
    SoftBank is the largest investor in Snapdeal and Paytm, India’s two other homegrown ecommerce leaders. It made a solo investment of US$1.4 billion into Paytm earlier this year. “India is a land of vast opportunity.

    We want to support innovative companies that are clear winners in India because they are best positioned to leverage technology and help people lead better lives,” said Masayoshi Son, founder, chairman, and CEO of SoftBank.
    Last year, Jeff Bezos announced an additional investment of US$3 billion in Amazon India, on top of an initial US$2 billion back in 2014.

    The investment by SoftBank is part of the April funding round in which Flipkart had raised US$1.4 billion in capital from Tencent, Ebay, and Microsoft.

    The latest capital infusion by SoftBank – a mix of primary and secondary capital – will give Flipkart enough ammunition to fight the giant Amazon further.

    Launched in October 2007, Flipkart is India’s biggest homegrown ecommerce marketplace and has raised nearly US$5 billion in capital.

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  • Despite Snapdeal Setback, SoftBank May Invest $2 Billion In Flipkart

    Despite Snapdeal Setback, SoftBank May Invest $2 Billion In Flipkart

    SoftBank Group is still in talks to invest in Flipkart – despite the collapse of discussions to fold a smaller rival into India’s largest e-commerce site – but it would do so through its Vision Fund, according to sources familiar with the matter.

    SoftBank, already invested in Indian online grocer Grofers and cab hailing firm Ola, tried for months to engineer a share swap transaction between Snapdeal and Flipkart, India’s two main homegrown e-commerce companies.

    That deal would have given SoftBank, as Snapdeal’s largest shareholder, a significant stake in Flipkart – but it was scuppered on Monday, in the face of opposition from Snapdeal’s founders, Kunal Bahl and Rohit Bansal.

    Three sources, who declined to be identified as the discussions were private, said SoftBank founder Masayoshi Son was still eager to invest in Flipkart through his Vision Fund, in which Saudi Arabia is also a major stakeholder.

    The Vision Fund’s planned investment is not dependent on a deal between Snapdeal and Flipkart, one of the sources said.
    Flipkart, the most significant Indian challenger to US retail giant Amazon’s ambitions in the country, declined to comment on the matter.

    A spokeswoman for SoftBank said the Vision Fund “follows an independent process and judges every investment on its own merit”. Snapdeal also declined to comment.

    Bloomberg reported earlier on Tuesday that the fund could invest up to $2 billion in Flipkart.

    The Vision Fund, created by the tech-to-solar conglomerate, has raised more than $93 billion from investors including Saudi Arabia’s main sovereign wealth fund and Apple.

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  • India’s Flipkart planning offline venture

    India’s Flipkart planning offline venture

    India’s Flipkart is planning to enter the brick-and-mortar space as a master franchisee for foreign brands. This follows other e-commerce companies opening on-ground ventures as the online market slows down.

    Flipkart is already in advanced talks with Giordano for a licensing deal to sell the Hong Kong­ apparel and accessory retailer’s products both offline and online in India. The plan is to set up a chain of Giordano­-branded stores along with a digital platform, says an insider.

    Flipkart will appoint sub-­franchisees with brick-­and-­mortar expertise to run the physical stores.

    Meanwhile, pure-play companies such as Faballey, Lenskart, Myntra, Nykaa, Pepperfry and Urban Ladder have already set up physical stores.

    Fashion retailer Myntra this year acquired the Indian franchisee agreement for Spain’s Mango and is appointing two sub-­franchisees for the label – Jaipur-­based Samarth, which runs more than 100 outlets of Benetton, Calvin Klein, Lee, Puma, Tommy Hilfiger, US Polo and Wrangler, and New Delhi­-based G&B which has 25 Benetton stores in the National Capital Region.

    Myntra is also selling its own brands. It opened its first brick-and-­mortar store in Bengaluru in March under its private brand Roadster on the 100 Feet Road.

    Beauty retailer Nykaa.com is also expanding on the ground. Its head of offline retail strategy, Adwaita Nayar, says touch and feel is important for customers in India. “Almost 90 per cent of the market for beauty products is still offline.”

    Nykaa.com intends to have large-format experiential stores as well as smaller outlets. Its aim is to have 30 stores at malls and high streets as well as travel retail by 2020.

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  • Flipkart fashion sale clocks 2x sales jump

    Flipkart fashion sale clocks 2x sales jump

    Running on its 3rd day, Flipkart said its Fashion Sale event has witnessed a 2x sale jump in the first 3 days of the total 9 day sale event. The ecommerce player said, it is confident about receiving similar response on the remaining 6 days of the sale event.

    Flipkart Fashion Sale which started on 10th of June’2017 is majorly offering theme based discounts including ‘Brand Stock Exchange, Late Night, Early Morning Shows, Fashion Tribes, Lucky Size Store etc.

    “The purpose of the sale isn’t to get a onetime spike but to shift the baseline itself. With learning from this sale, Flipkart will make several of these first time constructs regular engagement activities for its fashion shoppers,” said Rishi Vasudev, head-Fashion, Flipkart.

    Flipkart said, the biggest attraction for shoppers has been the Brand Stock Exchange, where over 20 brands such as Benetton, Puma, Fila, Fossil, Vero Moda, American Tourister, etc have participated.

    “Basis demand, discounts surged and prices were slashed every hour. As demand for a brand increased, discounts reduced. The construct proved to be very engaging for customers, and categories like kids, clothing & footwear spiked the maximum. Multiple editions of the Stock Exchange are expected to come again during the sale. Almost 25% of all customers who visited Flipkart for the day interacted with the Stock Exchange, thereby leading to 2X surge in sales volumes,” Vasudev added further.

    At an overall level, the sale has seen a healthy mix of repeat and new customers on the platform, with women customers again seeing a surge for both western & ethnic wear, the company said.

  • Flipkart to acquire eBay India

    Flipkart to acquire eBay India

    Three days after closing a funding round of US$1 billion, Flipkart is taking steps to acquire eBay India.

    Insiders say eBay India will be folded into Flipkart, reports start-up specialist publication E27.

    After Flipkart, Amazon, Shopclues, PayTM and Snapdeal, eBay is India’s six-largest e-commerce company.
    Flipkart’s latest funding round involved eBay, Microsoft and Tencent Holdings, setting its value at US$10 billion, up from US$5.39 billion last month.

    Launched in 2007, Flipkart is battling against Amazon to dominate the e-commerce market in India. Amazon arrived in India in 2012, ending Flipkart’s five years of supremacy.

    In 2014, Flipkart raised US$1 billion, a record for an Indian company, from such investors as Accel Partners, Russia’s DST Global and Tiger Global.

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  • India’s Flipkart closes $1 billion funding round

    India’s Flipkart closes $1 billion funding round

    Indian e-commerce giant Flipkart has closed a US$1 billion funding round, with plans to raise an equal amount over the next few months.

    Investors who have contributed to this round include eBay, Microsoft and Tencent Holdings, Bloomberg reports.
    The funding comes at a valuation of $10 billion, up from $5.39 billion when its minority investor and the mutual fund managed by Morgan Stanley slashed Flipkart valuation by 3 per cent last month. Its peak valuation was $15.5 billion in 2015.

    Launched in 2007, Flipkart was one of the first Indian tech companies to enter the global Unicorn startups club. It had an invincible run until Amazon entered India in 2012.

    In 2014, Flipkart raised $1 billion, a record amount for an Indian company, from investors including Accel Partners, Russia-based DST Global and Tiger Global, whose former MD Kalyan Krishnamurthy has joined Flipkart as CEO.

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  • Amazon India proposes $500m food venture

    Amazon India proposes $500m food venture

    Amazon India has applied to the government to invest US$500 million in a wholly owned venture that will allow the US eCommerce giant to stock locally produced food items and sell them online.

    If successful, it would become the first foreign retailer to enter the segment.

    Amazon already has an eCommerce marketplace in India, but while 100 per cent overseas capital is permitted for such platforms, they cannot sell products of their own. Last year, the government allowed for 100 per cent foreign investment in the retailing of processed foods made in India.

    Amazon has filed its application with the Department of Industrial Policy & Promotion (DIPP), which handles foreign investment in retailing and e­Commerce. The company plans to invest $500 million over five years and could start selling locally produced food items within six months of obtaining approval, says an insider.

    “We are excited by the government’s continued efforts to encourage foreign direct investment in India for a stronger food-supply chain,” says an Amazon spokesperson. “We have sought an approval to invest and partner with the government in achieving this vision.”

    Only Indian grocery delivery companies Big­Basket and Grofers have applied under
    the category, prompting the government to invite companies including CP Foods (Thailand), Heinz, Nestle and Walmart to provide feedback and investment plans.

    This followed the minister for food-processing industries Harsimrat Kaur Badal visiting London with a team of officials last year to meet representatives of such companies as Cobra Beer, Harrods, Marks & Spencer, Sainsbury’s and Tesco to drum up support for the policy.

    Amazon’s current online platform is open to Indian-­owned entities, and similar platforms are run by Flipkart, the country’s largest eCommerce company, and Snapdeal.

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  • Amazon big shopping to buy Flipkart

    Amazon big shopping to buy Flipkart

    In a bid to knock online marketplace Flipkart from its leadership position in India, eCommerce giant Amazon has injected Rs2010 crore (US$296 million) into its Indian unit.

    Regulatory filings show that the move takes Amazon’s total capital investment in India to more than Rs7000 crore in the past one year.

    “We will invest what it takes to become the customers’ preferred choice in India, and are encouraged that we are India’s largest and fastest-growing eCommerce marketplace,” says an Amazon India spokeswoman.

    A report in The Economic Times says Amazon is estimated to have spent more than Rs1000 crore last month to woo customers with special offers and discounts for the festive season, and is losing about Rs600 crore every month.

    Amazon entered India three years ago, introducing some of its global programs this year including its Prime service, which offers quicker deliveries and early-access deals.

    Last week, it announced Prime Video services for India offering Hollywood and other international movies and TV shows – plus launching nine original Indian shows, making it the largest Indian original line-up on an OTT (over-the-top) platform.

    Earlier this month Amazon announced the launch in India of its global program for start-up products, Launchpad, and in October it launched Global Store, offering products from its US online store that are not available in India.

    Meanwhile, Flipkart’s Sachin Bansal is seeking government help in the battle against Amazon.

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  • Amazon’s flagship India unit beats Flipkart’s in revenue

    Amazon’s flagship India unit beats Flipkart’s in revenue

    Amazon’s flagship unit in India Amazon Seller Services has more than doubled its revenues in the year ended March, leading rival Flipkart’s similar firm in terms of revenues.

    Amazon Seller Services’ turnover for the last fiscal rose 116% to Rs 2,217 crore while Flipkart Internet’s sales increased 153% to Rs 1,952 crore during the same period.

    Both units earn revenues through commissions, advertisements and shipping fees that they charge to sellers.

    While the Amazon unit outpacing Flipkart Internet is a significant development, both companies operate through a complex structure which makes total revenues of their units hard to conclusively interpret.

    Flipkart India, which runs the wholesale arm of the Singapore-registered etailer, posted 34% increase in revenues for FY16 with sales of Rs 12,818 crore, compared with Rs 9,351.7 crore a year ago.

    Amazon India’s wholesale unit has not filed its numbers for the financial year yet.

    Experts feel Flipkart’s retail sales could be at least 15-20% higher than its wholesale revenues after including margins. Flipkart didn’t disclose profit or loss figures. It made a loss of Rs 837 crore in 2014-15.

    Doubling of revenues of both the ecommerce giants indicates the rapid pace of growth in the ecommerce market aided by billions of dollars in overseas funding even as brick and mortar peers struggle.

    Flipkart India’s turnover is now nearly double the country’s organised wholesale market that has players such as Wal-Mart and Metro Cash & Carry. Experts, though, feel the numbers are minuscule compared to other markets.

    “Given the potential of the market, the numbers are still not huge and the pace of growth has come down. Even within the overall organised retail market, their contribution is just a fraction despite spending aggressively to gain market share,” said Harminder Sahni, founder of retail consultancy firm Wazir Advisors.

    “Flipkart will have a tough time going forward in terms of funding as well as competing with Amazon,” he said.

    The financial performance numbers are also reflective of the change of pace in investments by both the etailers. Amazon India has ramped up investment since 2015 as it looks to increase its market share, even as Flipkart has been focused on cutting its cash burn rate.

    Flipkart Marketplace, a Singapore-based subsidiary and investment holding company which owns 99.74% stake in Flipkart Internet, received equity infusion of Rs 1,629 crore in fiscal 2016, significantly down from Rs 5,456 crore in the preceding year.

    In comparison, Amazon Seller Services received capital infusion of Rs 7,463 crore in fiscal 2016, up from Rs 1,888 crore in the previous year.

    The rivalry will only intensify — Amazon has committed $5 billion to the Indian market, and is outspending Flipkart by 3-4 times by investing aggressively in areas like video and grocery delivery. An Amazon India spokesperson said it is now the largest as well as fastest growing online marketplace.

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  • Wal-Mart Boosts Stake in JD.com, Expands Further in China

    Wal-Mart Boosts Stake in JD.com, Expands Further in China

    Wal-Mart Stores Inc. has reportedly increased its stake in Chinese eCommerce website, JD.com Inc., to 10.8% from 5.9%, aiming to grab more market share in the world’s largest online market. Shares of JD.com jumped 7.5% in after-hours trading following the news.

    The move comes nearly four months after Wal-Mart inked a deal with JD.com. to sell its Chinese eCommerce business, Yihaodian to JD.com in exchange for a 5% equity stake in the company.

    JD.com is the second-largest online retailer in China after Alibaba Group Holding Ltd. in terms of market cap. The expanded deal with JD.com is expected to offer Wal-Mart a better chance of competing in the cut-throat retail industry in China and expand its reach in the country. Evidently, it expects to generate 25% of global retail growth from the region over the next five years. Further, this will benefit Wal-Mart with JD.com’s huge customer base and its same-day delivery network.

    WAL-MART STORES Price and Consensus

    We note that Wal-Mart has been struggling of late to expand its reach in China. The retailer opened its first store in the country in 1996, but only has about 430 stores there at present. The company has stated various reasons for the sluggish business operations in the region.

    In China, the company has long been dealing with food safety scandals despite trying to maintain high food safety standards. Wal-Mart China too has been facing significant pressure from government austerity measures and deflation. Further, the company faces problems in understanding discerning Chinese consumers as their buying decisions aren’t always price driven.

    Apart from expansion in China, this Bentonville, AR-based company is leaving no stone unturned to acquire a stake in the online business. In this regard, it continues to make huge investments in eCommerce initiatives, including acquisitions. Recently, Wal-Mart completed the acquisition of eCommerce company, Jet.com, Inc., which marked a huge step forward in its quest to dominate ecommerce king, Amazon.com, Inc. Wal-Mart is also in talks to acquire a stake in India’s largest eCommerce firm, Flipkart Online Services Pvt., in order to expand in the fast-growing online retail market.

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  • Flipkart tightens cash tap to its marketplace by 70%

    Flipkart tightens cash tap to its marketplace by 70%

    Flipkart, the Singapore-based parent of India’s online retail giant, reduced investment into its marketplace unit by 70% in the year ended March, effectively restraining the firm’s sales during the period.

    Flipkart Marketplace, a Singapore-based subsidiary and investment holding company, received equity infusion of Rs 1,629 crore in fiscal 2016, significantly lower than the Rs 5,456 crore it secured in the preceding year, show Singapore government filings accessed. Contrasting with the reduced investment into Flipkart’s commerce business, US-based Amazon’s main India unit, Amazon Seller Services, received capital infusion of Rs 7,463 crore in fiscal 2016, up from Rs 1,888 crore in the previous year. Both companies have relied heavily on investments to drive sales growth, primarily using the cash to lure customers with huge discounts.

    While the eight-year-old Flipkart, which has raised $3.2 billion (Rs 21,500 crore) until now, has had the lead and can possibly afford to channel capital into strengthening other critical business arms, Amazon is aggressively catching up. A senior Flipkart executive who declined to be identified said the company has reduced its cash burn by about 40% this year.

    “It is much lesser than $40 million,” this person said, adding that “supply-chain costs have improved by 20% and we have also done a lot of work in getting our seller costs in shape.” Flipkart declined to offer comment for this report. Flipkart’s gross merchandise value, or gross sales, remained stagnant at $3.5 billion-$4 billion for most of the past year-and-half, before inching back to $4.5 billion-$5 billion in recent months.

    Amazon India has managed to narrow the gap with Flipkart’s gross sales to 15-20% in recent months, according to ecommerce executives, investors and analysts. They added that Amazon India is estimated to be out-spending Flipkart by two-three times, especially in marketing and promotions. The total equity investment in Flipkart Marketplace until now stands at Rs 7,909 crore, with most of the money flowing in during recent years.

    Amazon Seller Services’s total infusion stands at about Rs 9,600 crore. The two companies are competing to trump each other during their ongoing festival sales, although analysts say Flipkart’s investment in marketing and advertising is significantly lower this time. “Flipkart is reaping the benefits of investing a lot over the past two-three years. They have created a brand value so they may not have to invest as much,” said Satish Meena, analyst with Forrester Research.
    Both Flipkart and Amazon have a slew of companies registered in India that run their business across commerce, logistics, wholesale and payments. These units get capital infusion from investment holding companies registered overseas. Flipkart’s commerce business in India is housed under two companies.
    Flipkart Internet owns Flipkart.com and registers sales from advertisements and commissions charged on merchants. Flipkart Marketplace owns a 99.74% stake in Flipkart Internet. We obtained access to regulatory filings related only to Flipkart Marketplace. The other business is Flipkart India, the company’s wholesale cash-and-carry unit, which is owned by Flipkart directly and registers product sales. Flipkart India and Flipkart Internet reported a combined a loss of Rs 2,000 crore for fiscal 2015, show filings with the Registrar of Companies.

    Their combined sales trebled to Rs 10,390 crore that year, with Flipkart India accounting for over 90% of it. Financial numbers for the year ended March 2016 are yet to be filed.

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  • Wal-Mart Stores mulls Flipkart ownership

    Wal-Mart Stores mulls Flipkart ownership

    Wal-Mart Stores is seeking to pay as much as US$1 billion for a share of India’s Flipkart Online Services to counter Amazon’s foray into the fast-developing eCommerce market.

    Under a proposed agreement, reported by both Bloomberg and the Wall Street Journal, the world’s largest retailer would take a minority Flipkart ownership. Insiders say the terms have not yet been finalised for the deal, which follows on the heels of Amazon CEO Jeff Bezos announcing plans to spend a further $3 billion in India.

    India’s largest online retailer, Flipkart is worth about $16 billion, according to research firm CB Insights.

    India’s online market will expand at an average of 45 per cent annually in the next four years and reach $28 billion by 2020, according to estimates from Kotak Institutional Equities.

    Wal-Mart first established a retail joint venture in India with Bharti Group, which runs the country’s largest telecommunications organisation, Bharti Airtel. Eventually Wal-Mart sold its stake to its partner.

    Meanwhile, Amazon has been making major investments in infrastructure and partnerships in India, so far costing about $2 billion.

    Wal-Mart last month agreed to buy US eCommerce company Jet.com for about $3.3 billion, and put founder Marc Lore in charge of the combined company’s online business.